Ethereum (ETH) Price Could Recover If the Pectra Upgrade Leads to a Surge in DApp and Ethereum Network Activity

Reclaiming the $2200 level remains the first price challenge for ETH.  ETH price could recover if the Pectra upgrade leads to a surge in DApp and Ethereum network activity.

Key takeaways:

Reclaiming the $2,200 level remains the first price challenge for ETH.

ETH price could recover if the Pectra upgrade leads to a surge in DApp and Ethereum network activity.

Despite successfully implementing a key network upgrade on May 7, surprising traders, there’s still no clear chance of seeing Ether (ETH) rise 22% to retake the $2,200 mark.

According to data from crypto derivatives exchange Bitget, the ETH futures premium has remained below the 5% neutral threshold, indicating a lack of appetite from leveraged bulls. More significantly, this indicator showed little change at 3% after the Pectra upgrade, suggesting that traders did not adjust their positions despite the upgrade’s successful deployment.

Part of the subdued response can be attributed to investors’ focus on macroeconomic issues, especially with rising recession risks and uncertainty in global trade disputes. However, traders’ lack of interest in Ether predates the recent worsening of risk aversion conditions.

In the first three months of 2025, ETH suffered a 28% underperformance compared to the broader cryptocurrency market capitalization.

Lackluster price impact follows Pectra upgrade as blockchain competition intensifies

The lackluster price impact following the Pectra upgrade also reflects broader dissatisfaction, as competitors like Solana and BNB Chain have been gaining traction.

Usually, high Ethereum base layer fees, which average $1 per transaction, limit network activity, but these costs have dropped below $1 since mid-February. Additionally, Ethereum’s leading layer-2 solution, Base, currently boasts 10.3 million monthly active users—far fewer than Solana’s 82.2 million and BNB Chain’s 25.9 million, according to Token Terminal data.

Solana has dominated the decentralized exchange sector, particularly in token launches, by offering an integrated user experience. Similarly, Hyperliquid has exceeded expectations in perpetual futures trading, demonstrating that traders’ primary focus is not necessarily on Ethereum’s decentralization and security. Meanwhile, Tron has made significant inroads in the stablecoin market.

Ethereum’s leadership in total value locked (TVL) remains undisputed at $53.7 billion. However, this has provided little benefit to ETH holders, as network fees have been relatively low at $19 million over the past 30 days, according to DefiLlama. For comparison, Tron has amassed $51.8 million in fees in the same period, and Solana has accrued $39.4 million.

Noam Hurwitz, head of engineering at Alchemy, noted that Ethereum blob fees have dropped to their lowest possible level since the Pectra upgrade. For Hurwitz, Ether’s success depends on base layer scalability, including further improvements in the rollup mechanism, and ultimately, a more seamless user experience.

Bridging assets and data across Ethereum’s layer-2 ecosystem has long been a challenge, while users on Solana and BNB Chain can easily switch between multiple decentralized applications (DApps). The Pectra upgrade, while a step in the right direction, does not resolve this issue, which explains why ETH has been unable to reclaim the $2,200 level seen in early March.

For Ether’s price to climb 22% from its current $1,810 level, investors likely need reassurance that the network’s progress, whether through deposits or layer-2 growth, translates into clear benefits. Ultimately, improved staking yields or stronger incentives are needed to drive broader adoption of DApps, which in turn would generate increased demand for ETH within the ecosystem.