$ETH Ethereum News: The Ethereum Pectra upgrade launches on May 7 — Will ETH prices finally rise?
The long-awaited Pectra upgrade of Ethereum will launch next week, promising significant improvements in user experience, staking, and trading flexibility. As technical indicators suggest a market bottom, could Pectra be the catalyst to kickstart a long-awaited ETH rally?
Ethereum lags behind competitors despite the growth market.
Despite the broader market recovering, Ethereum (ETH) has underperformed throughout 2024 and early 2025. Trading at $1,813 as of April 30, ETH is still down 56% from its local peak in December 2024 and has a long way to go to reclaim its all-time high of $4,870 set in November 2021. Meanwhile, rivals like Solana and BNB have shown stronger price action.
However, with the Pectra upgrade expected to launch on May 7, Ethereum may be poised for a turnaround - if the update meets expectations.
What is Ethereum's Pectra upgrade? Key features and EIPs explained.
The Pectra hard fork includes 11 Ethereum Improvement Proposals (EIPs) aimed at addressing some of the network's most persistent issues - scalability, staking, and usability. The most notable upgrade is EIP-7702, which introduces gas fee sponsorship and allows users to pay gas fees using tokens other than ETH.
This change will significantly enhance the user experience of Ethereum, particularly for new users, mobile applications, and crypto games – all of which have struggled to onboard due to gas fees and wallet complexity.
Staking upgrade attracts institutions.
Pectra also includes EIPs 7251, 6110, and 7002, specifically:
Increasing the limit for validators from 32 ETH to 2,048 ETH.
Simplifying the onboarding/offboarding process for validators.
Improving efficiency and flexibility of staking.
These changes are particularly important for institutional validators, who have shown dwindling interest in ETH over the past year. With easier onboarding and more control, Pectra could renew institutional participation in staking and lock up more ETH, reducing circulating supply.
How could Pectra impact ETH's price dynamics?
This upgrade is designed to improve both the demand and supply dynamics of ETH:
Increased demand: Better user experience and fee flexibility could attract more developers, users, and trading volume.
Reduced supply: More ETH being staked along with increased network activity could enhance ETH burning, creating deflationary pressure.
Currently, Ethereum's burn rate has decreased to around ~70 ETH per day, compared to over 2,000–4,000 ETH per day in 2024. With more transactions and usage post-Pectra, this figure could rise, reinforcing the value of ETH as a deflationary asset.
Technical signals suggest that ETH may have hit a bottom.
Technically, Ethereum seems to have found a local bottom. The weekly RSI broke the downtrend on April 20, which may indicate a trend reversal. ETH has dropped nearly 66% from its December high, and the market structure suggests that the worst may be over.
While previous Ethereum upgrades - such as Merge, Shapella, and Dencun - have seen short-term price spikes, Pectra arrives in a different context: the third year of the market cycle, where history shows this is when major rallies occur.
If market sentiment aligns and macro headwinds ease, Pectra could act as a stimulating factor in the narrative to help ETH regain investor attention and market share.
Could Pectra be Ethereum's turning point?
The fundamentals of Ethereum remain strong, but its narrative has lagged behind faster-moving competitors. The Pectra upgrade aims to address this - bringing gas fee sponsorship, multi-token payments, and staking upgrades that could restore adoption and investment.
If Pectra succeeds in improving user experience and confidence in staking, and coincides with a broader altcoin rally, ETH could finally begin to catch up in a growing market. Investors will also be watching the Fusaka upgrade at the end of 2025, which could extend momentum further, according to Cointelegraph.
