Ethereum Price Rally Faces Crucial Test
Ethereum has surged nearly 40% in just one week , rising from around $1,800 to $2,500, driven by a successful network upgrade and improved global trade sentiment. However, analysts are cautious — they say further gains will depend not on hype, but on stronger fundamentals and real demand. Can ETH Hold Gains Without Institutional Momentum?
The recent jump came after Ethereum launched the Pectra upgrade on May 7, its most important update since Dencun last year. The upgrade improved staking limits, wallet usability, and network efficiency — all key steps toward greater scalability and institutional adoption.
Sean Dawson, Head of Research at Derive.xyz, said the smooth rollout of Pectra boosted confidence in Ethereum’s long-term potential.
“The ETH Pectra upgrade went live without issues, increasing confidence in Ethereum’s ability to scale and paving the way for further institutional adoption,” Dawson told .
Derive’s volatility models now show a 20% chance that ETH could hit $4,000 by the end of 2025 , up sharply from 9% the previous week. At the same time, ETH is expected to remain more volatile than Bitcoin in the near term.
Crypto-Native Investors Lead the Charge
Despite the rally, institutional flows remain mixed . While Bitcoin ETFs saw $600 million in inflows last week, Ethereum ETFs recorded $55 million in outflows , according to Matteo Greco, research analyst at Fineqia International.
This suggests that crypto-native traders , not big institutions, have been the main drivers of the price surge.
“The scale and strength of the price recovery, combined with modest outflows from Ethereum ETFs, suggest that crypto-native investors, rather than institutional inflows, have primarily driven the surge,” Greco explained.
James Toledano, COO of Unity Wallet, also expressed caution. He warned that without stronger regulatory clarity or sustained institutional interest, Ethereum may struggle to reach new all-time highs.
“Anyone who is serious about crypto would prefer that fundamentals are the driving force,” he added.
Macro Optimism Supports Risk Appetite
In addition to technical improvements, positive macro developments gave Ethereum a boost. U.S. President Donald Trump announced progress in trade talks with China and a new agreement with the U.K., fueling optimism across both traditional and digital markets.
Equity benchmarks like the S&P 500 and Nasdaq posted their biggest one-day gains in months, led by tech stocks. This helped improve investor sentiment toward riskier assets like cryptocurrencies.
Still, the rally lost some steam as profit-taking kicked in. On Monday, Ethereum dipped alongside Bitcoin and Solana, signaling that the market remains sensitive to short-term moves.
What’s Next for Ethereum?
While Ethereum’s fundamentals are improving, analysts stress that the next phase of growth will require more consistent demand and regulatory clarity .
For now, the Pectra upgrade gives developers and users more confidence in the network’s future. It also positions Ethereum better for wider adoption in DeFi, NFTs, and Web3 applications.
As the market continues to evolve, Ethereum’s success will hinge on whether it can attract long-term capital — not just speculative trading.
Conclusion
Ethereum’s recent price surge shows growing interest in the network, especially after the successful Pectra upgrade. Yet, experts warn that hype alone won’t carry it forward. For Ethereum to break past previous highs, it will need real usage, strong fundamentals, and broader institutional support .
The path ahead looks promising — but also challenging.
