Ethereum's Pectra Upgrade Stumbles on Testnet, Price Drops to 2024 Lows

The highly anticipated Ethereum Pectra upgrade, slated for release on the Holesky testnet on February 24, encountered a significant misconfiguration issue upon deployment. This issue, which affected major execution clients such as Geth, Nethermind, ETHjs, and Besu, led to finalization problems where nodes failed to reach a consensus on produced blocks, rendering them immutable.

Georgios Konstantopoulos, CTO of Paradigm and a key figure behind the upgrade, highlighted a bug related to the deposit Contact Address (CA) for the Pectra upgrade. Despite the setback, developers reassured the community that these issues would be resolved promptly following updates on other execution clients.

The Pectra upgrade aims to introduce eleven updates focused on user experience, blob scaling, and smart wallet functionality. These updates are designed to enhance Ethereum's scalability and competitiveness against rivals like Solana. Initially planned for activation on the Holesky testnet on February 24, followed by Sepolia on March 5, and then the mainnet, the timeline for these upgrades is now uncertain due to the Holesky activation issues.

Meanwhile, Ethereum's price dropped to its 2024 lows above $2000, but the price area has previously stopped liquidation cascades and could offer a relief bounce if it holds. Despite the recent price dip, large players have doubled down on ETH, with a 24% increase in 10K-100K ETH address balances over the past year, primarily fueled by inflows from <1K ETH wallets.