Ethereum's Rebound: Is the Fusaka Upgrade Enough to Fuel a Breakout Above $3,500?

Ethereum's journey from a $95.18 average in 2020 to a $4,900 peak in 2025 has been defined by relentless innovation and market dynamics. The Fusaka Upgrade, activated on December 3, 2025, represents a pivotal step in Ethereum's roadmap, introducing PeerDAS (Peer Data Availability Sampling) and doubling the block gas limit to 60 million units. These changes aim to reduce bandwidth requirements by 85% and enable 100,000+ transactions per second on Layer 2 (L2) rollups, positioning Ethereum as a scalable settlement layer for on-chain finance according to market analysis. But can this technical leap translate into sustained price momentum above $3,500?

Technical Momentum: RSI and MACD Signal Renewed Bullishness

Post-Fusaka, Ethereum's Relative Strength Index (RSI) has rebounded from oversold territory, currently hovering at 52-a neutral-to-bullish threshold. The Moving Average Convergence Divergence (MACD) histogram turned positive for the first time since mid-November 2025, with a bullish crossover confirming renewed momentum according to technical indicators. Analysts argue that the $3,500 level is a critical target, supported by the convergence of 20-day, 50-day, and 200-day exponential moving averages (EMAs) in the $3,300–$3,500 range according to price forecasting data. A breakout above this cluster could propel ETH toward $3,632 and eventually $3,800–$4,000, while a failure to hold above $3,000 risks a retest of the $2,800–$2,900 support zone according to market analysis.

On-Chain Activity: Scalability and Cost Efficiency as Catalysts

The Fusaka Upgrade's PeerDAS mechanism and increased blob throughput have already reduced L2 transaction costs by 40–60%, enabling rollups like Arbitrum and Optimism to process transactions at near-zero fees according to on-chain data. On-chain metrics reflect this: daily active addresses and transaction volume have surged, with Ethereum's network now handling 1.2 million transactions per day post-upgrade according to trading platform data. This surge in utility aligns with historical patterns where Ethereum's price peaks coincided with major upgrades, such as the 2021 NFT boom and the 2022 Proof-of-Stake transition according to price history analysis.

Institutional Inflows and Derivatives Data: A Bullish Undercurrent

Institutional confidence in Ethereum has grown, with BitMine and BlackRock increasing holdings and U.S. spot ETFs recording net inflows. Derivatives data further reinforces this trend: open interest in Ethereum futures has risen by 22% since December 2025, while taker buy volume suggests strong spot accumulation according to market signals.

These signals mirror pre-2025 patterns where institutional participation preceded price surges, such as the $4,891.70 all-time high in 2021 according to historical data.

Risks and Roadblocks: The Path to $3,500 Is Not Without Hurdles

While the Fusaka Upgrade addresses critical scalability issues, challenges remain. Vitalik Buterin has highlighted unresolved bottlenecks, including sequential transaction processing on the base layer and centralization risks from block builders according to technical analysis. Additionally, macroeconomic factors-such as the Federal Reserve's interest rate policies-could dampen risk-on sentiment, as seen in 2022 when Ethereum's price stabilized between $1,000 and $2,000 amid inflationary pressures according to market history.

Conclusion: A Calculated Bet on Ethereum's Future

The Fusaka Upgrade has laid the technical groundwork for Ethereum to reclaim its role as the leading Layer 1 blockchain. With RSI and MACD indicators trending bullish, on-chain activity surging, and institutional inflows accelerating, the $3,500 target appears within reach. However, investors must remain cautious of macroeconomic headwinds and the need for subsequent upgrades like Glamsterdam (2026) to address decentralization risks. For now, Ethereum's rebound hinges on whether the market can sustain the momentum generated by Fusaka-and whether the broader crypto ecosystem is ready to embrace its next phase of growth.