1. **Technical Upgrades Boost Confidence**
The **Pectra Upgrade** completed in April 2025 is a core catalyst, introducing EIP-7702 (account abstraction optimization) and EIP-7251 (increasing staking cap to 2048 ETH), significantly enhancing user experience and network efficiency, and boosting Layer 2 scalability (e.g., doubling Blob capacity). This is seen as a key step for Ethereum to solidify its ecological competitiveness.
### 📈 2. **Price Volatility and Market Divergence**
- **Short-term Volatility**: In May, ETH experienced severe fluctuations, falling below the $2600 support level three times, with a weekly drop of over 15%, but rebounding to $2732 by the end of the month, resulting in a monthly increase of 50%.
- **Bull-Bear Game**: Institutions continue to increase holdings through ETFs (with a monthly net inflow of 500,000 ETH), but whale selling pressure is intensifying (300,000 ETH sold in 72 hours), reflecting a divergence in market sentiment.
### 🔮 3. **Challenges and Opportunities Coexist**
- **Competitive Pressure**: Public chains like Solana are capturing market share in the Meme coin and AI narratives, with Ethereum's mainnet revenue falling out of the top 20 public chains. The 'parasitic effect' of Layer 2 ecosystems (e.g., Base profits not benefiting the mainnet) weakens value capture.
- **Long-term Potential**: If fragmentation issues are resolved and new narratives (DeFi recovery, RWA) are activated, Standard & Poor's predicts that the price could reach $14,000 by the end of 2025, relying on technological implementation and institutional adoption.
### 💎 Conclusion
Ethereum is at a **critical juncture of technological breakthroughs and ecological transformation**. The Pectra upgrade lays the foundation for efficiency, but it must overcome the marginalization of the mainnet and competitive challenges to regain its leadership position. Investors should pay attention to the integration progress of Layer 2 and macro capital flows.
