Ethereum (ETH) has experienced significant volatility in May 2025, marked by a notable surge from around $1,800 at the beginning of the month to trading near the $2,500-$2,600 range. This upward movement was largely catalyzed by the recent Pectra upgrade, launched on May 7th, which has improved staking, transaction capacity, and data transmission efficiency, attracting substantial new capital to the network. While the price has seen a considerable increase over the past month (up over 50%), recent days have shown some short-term selling pressure and consolidation, with ETH dropping from recent highs and facing resistance around $2,700-$2,850. Technical indicators like the Relative Strength Index (RSI) have at times indicated overbought conditions, suggesting the potential for a healthy correction or further consolidation.
Despite the short-term fluctuations, the overall market sentiment for Ethereum remains cautiously optimistic, with strong underlying fundamentals. The Pectra upgrade is expected to enhance Ethereum's competitiveness against other blockchains and improve its scalability, setting the stage for increased adoption, particularly in areas like AI. Institutional interest continues to grow, and the possibility of spot Ether ETFs gaining momentum with in-kind creation and staking approvals later in 2025 could further boost prices. While some analysts foresee a potential retest of lower support levels around $2,250-$2,350 in the short term, many believe that Ethereum's ongoing evolution, increasing utility in DeFi and NFTs, and reduced selling pressure from decreasing exchange supply could drive ETH towards the $3,000 to $4,000 range, and potentially even $5,000, by late 2025.