Behind Ethereum’s recent strong rise: Is it a boost from the Pectra upgrade or a bottoming out?

Many people have asked whether the sharp rise in Ethereum $ETH is related to the recent Pectra upgrade. The answer is probably not.

The Pectra upgrade is more like the "finishing work" of the Cancun upgrade, mainly some underlying optimizations and detail improvements, rather than groundbreaking technological innovations.

From a technical perspective, the four EIPs included in the Pectra upgrade all point in the same direction: to make Ethereum run more stably and efficiently. EIP-7044’s state expiration standardization, EIP-7524’s fuel limit redefinition, EIP-7697’s transaction pipeline optimization, and EIP-6789’s difficulty adjustment improvements—these are all typical “patching up” upgrades that address some of the marginal issues left behind after the Cancun upgrade.

The real logic that determines the price trend of Ethereum this time is actually the "value restoration" after excessive FUD.

In the past few months, Ethereum has indeed experienced a round of "concentrated firepower" questioning: the dispersion of layer 2 liquidity has been magnified into ecological division, the performance comparison with Solana has been interpreted as a failure of the technical route, and the expansion of many layer 2 ecological applications has not been as expected. The stacking of technical narratives such as Restaking, modularization, and zk cannot be captured by value, etc.

While all the focus is on Ethereum’s problems, some key facts are overlooked: the total locked value of DeFi remains stable at $119B, the Cancun upgrade has indeed significantly reduced layer2 costs, ETF inflows continue to increase, and new narratives such as RWA and PayFi are also mainly developing in the Ethereum ecosystem.

Ethereum's fundamentals are not as bad as market sentiment reflects.

Institutional investors have clearly seen through this emotional imbalance. The most typical example is Abraxas Capital's huge purchase of 242,652 ETH (about $561 million). Moreover, from May 9 to 14, large ETH transfers (>$1M) also increased significantly, and the ETH balance of institutional wallet addresses increased significantly, all of which indicate that there is a planned large-scale institutional position building behavior.

So, if we must find a logic for this round of Ethereum rise: Ethereum has been over-FUDed and needs to rediscover its existing value, and institutions took the opportunity to buy at the bottom?