Ethereum's Pectra Upgrade May Boost ETH Price 66%
1min read Ethereum's upcoming Pectra upgrade, scheduled for May 7, is poised to introduce significant improvements to the network, potentially reigniting interest and driving the price of ETH higher. The upgrade includes 11 Ethereum Improvement Proposals (EIPs) aimed at enhancing scalability, user experience, and staking efficiency. One of the standout features is EIP-7702, which allows externally owned accounts to temporarily act like smart contracts, enabling fee sponsorship and gas payments in tokens other than ETH. This could make Ethereum more user-friendly, lowering entry barriers and improving wallet functionality, particularly for non-technical users in gaming, payments, and mobile apps.
On the staking side, EIPs 7251, 6110, and 7002 will allow validators to hold up to 2,048 ETH instead of just 32, and simplify the onboarding and exit processes. These changes are expected to stimulate renewed engagement from institutional validators, who have been disappointed and started selling their ETH holdings. The upgrade could also lead to more ETH being locked in validator nodes, tightening the circulating supply and potentially exerting upward pressure on price. Additionally, innovative wallet features could drive user adoption, increasing transaction throughput and accelerating ETH burning, which would reduce the supply even further.
Despite the potential benefits of the Pectra upgrade, its impact on ETH price may take time to materialize. However, the upgrade could provide the narrative ETH needs to regain market momentum. Technically, ETH appears to have already formed a local bottom, with the weekly RSI breaking out of its downtrend on April 20. This marks the end of a correction that lasted since December 2024 and wiped out as much as 66% of ETH’s value. A new uptrend could be underway, but it remains to be seen whether Pectra will be its trigger.
Ask Aime: What impact will Ethereum's upcoming Pectra upgrade have on the cryptocurrency market?
Historically, Ethereum upgrades have often coincided with short-lived price spikes that failed to create momentum. However, the market cycle is now in its third year, similar to 2021, when Ethereum’s Berlin and London upgrades helped fuel a major bull run. If history rhymes, Pectra could sync with the broader rally and mark Ethereum’s return to strength. Looking ahead, the Fusaka hard fork scheduled for late 2025 could add further upside potential to Ether.
