Will Ethereum fall after the upgrade?

Ethereum's Pectra upgrade, boosting wallet usability and network scalability, is expected to increase demand and potentially support price growth, though unforeseen technical issues or unmet expectations could cause temporary dips.

Mar 04, 2025 at 01:56 pm

Ethereum has ushered in a Pectra upgrade, attracting everyone's attention to its price trend. Will Ethereum fall after the upgrade? This needs to be discussed from many aspects.

Let’s look at the technical upgrade level first. In the Pectra upgrade, EIP-7702 improves the crypto wallet experience and account abstraction, which can attract more users to use Ethereum wallets and increase user stickiness. Judging from past experience, technology upgrades such as Ethereum 2.0 have promoted network performance improvements, attracted more developers and users, and have a positive push to price. Similar positive technological improvements this time are expected to increase Ethereum demand due to the increase in users and developers, and support prices from the perspective of supply and demand rather than lead to declines.

Let’s look at EIP-7251 again, and increase the maximum stake limit of verifiers from 32 ETH to 2,048 ETH. This change can improve the degree of network decentralization and security, and will make more investors feel that the Ethereum network is more reliable. Reliable networks can often attract more capital inflows. When more funds are optimistic about Ethereum and enter the market, it will increase the demand for Ethereum to support the price rather than push the price down.

EIP-7691 Increases the maximum number of blobs to strengthen Rollup expansion capabilities, which helps Ethereum stay efficient in high transaction volume environments. An efficient network can better serve users and projects, attracting more projects based on Ethereum development. As the number of projects increases, the use and demand for Ethereum will also increase. From the perspective of market demand, it will stabilize or drive prices up instead of letting prices fall.

Analysis from the perspective of market demand. Ethereum has a strong demand in the fields of smart contracts and decentralized applications. After the upgrade, technology improvement will further expand application scenarios, such as the new wallet function may give birth to more innovative financial applications. Application scenario expansion will increase demand for Ethereum. When supply is relatively stable, increasing demand will drive prices up rather than causing prices to fall.

The macroeconomic environment also has an impact on Ethereum prices. When global economy is unstable, investors will seek new investment channels, and digital currencies like Ethereum may become the choice. If Ethereum completes its upgrade at this time, its technological advantages will be more obvious, attracting more safe-haven funds to inflow and pushing prices up rather than falling.

In terms of policies and regulations, if the region is in a friendly way to digital currency policies such as Ethereum, the upgraded Ethereum is more popular due to its technological advantages, more funds will enter the market and prices are expected to rise. Even if the policy does not change significantly, a stable policy environment will help Ethereum develop at its own pace of upgrading, and maintain or increase prices by relying on the advantages brought by the upgrade.

However, the market situation is complicated. If serious technical loopholes occur on the main network during the upgrade process and the difficulty in repairing it may cause panic between users and investors, leading to withdrawal of funds and falling prices. However, judging from the current situation of the Holesky test network, although there are minor problems after launch, the development team actively resolved it, and there is no such vulnerability that seriously affects the main network.

Investor sentiment will also affect prices. If the market expects too high an upgrade, some functions after the upgrade do not meet some investors' expectations, which may trigger short-term selling and lead to price declines. But in the long run, as long as the upgrade actually improves Ethereum's performance and value, the price will eventually return to a reasonable upward track.

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