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The recent strong rise of Ethereum: is it driven by the Pectra upgrade or a rebound from the bottom?
The significant rise of Ethereum $ETH this time has led many people to question whether it is related to the recent Pectra upgrade? The answer may not be.
The Pectra upgrade is more like the "final touches" of the Cancun upgrade, mainly involving some foundational optimizations and detail enhancements, rather than groundbreaking technological innovations.
From a technical perspective, the four EIPs included in the Pectra upgrade all point in the same direction: to make Ethereum run more stably and efficiently. The state expiration standardization of EIP-7044, the redefinition of fuel limits in EIP-7524, the transaction pipeline optimization of EIP-7697, and the difficulty adjustment improvements of EIP-6789 – these are all typical "fix-and-patch" upgrades that address some marginal issues left after the Cancun upgrade.
The logic that truly determines the price movement of Ethereum this time is actually the "value recovery" after being overly subjected to FUD.
In the past few months, Ethereum has indeed undergone a round of concentrated scrutiny: the dispersion of layer2 liquidity has been amplified into ecological fragmentation, the performance comparison with Solana has been interpreted as a failure of the technical route, and the expansion of various layer2 ecological applications has not met expectations, with narratives around Restaking, modularization, zk, and other technologies unable to capture value, etc.;
When all the focus is on the issues surrounding Ethereum, people overlook some key facts: the total value locked in DeFi remains stable at $119B, the Cancun upgrade has significantly reduced layer2 costs, ETF fund inflows continue to strengthen, and new narratives such as RWA and PayFi are mainly developing within the Ethereum ecosystem.
The fundamentals of Ether are not as bad as the market sentiment reflects.
Institutional investors have clearly seen through this emotional imbalance. A typical example is Abraxas Capital's massive purchase of 242,652 ETH (approximately $561 million). Moreover, during the period from May 9 to 14, large ETH transfers (>$1M) also significantly increased, and the ETH balances of institutional-level wallet addresses grew noticeably, indicating a planned large-scale accumulation by institutions.
So, if we have to find a logic for this round of Ethereum pump: Ethereum has been overly FUDed, and there is a need to rediscover its existing value, while institutions took the opportunity to buy in early?