Why did the price of ETH rise?

The price of Ethereum (ETH) experienced a notable increase on May 14, 2025, driven by several key factors:

1. Ethereum "Pectra" Upgrade

The recent implementation of the "Pectra" upgrade has significantly improved the Ethereum network, increasing its scalability, reducing transaction fees, and enhancing overall efficiency. Additionally, this upgrade introduced a token burning mechanism, making ETH deflationary by reducing its circulating supply. These improvements have strengthened investor confidence and contributed to the price increase.

2. Increased Institutional Demand

Large institutional investors have shown renewed interest in Ethereum. For example, Abraxas Capital Management recently acquired 211,030 ETH, valued at approximately $477.6 million. These massive purchases have generated a domino effect in the market, further driving up the price of ETH.

3. "Short Squeeze" Effect and Increased Open Interest

The market experienced a significant "short squeeze," where short positions worth approximately $300 million in ETH were liquidated. This phenomenon, along with an increase in open interest in Ethereum futures, has intensified the bullish pressure on the price.

4. Historical Trends and Technical Patterns

Historically, May has been a favorable month for Ethereum. Current technical patterns, such as the formation of a "rounding bottom," suggest the possibility of ETH reaching higher levels, with some analysts projecting prices of up to $4,000 in the short term.

Together, these factors have contributed to the surge in the price of Ethereum.

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