Key takeaways:
Reclaiming the $2,200 level remains the first price challenge for ETH.
ETH price could recover if the Pectra upgrade leads to a surge in DApp and Ethereum network activity.
Ethereum successfully implemented a key network upgrade on May 7, but Ether (ETH) price and its derivatives metrics showed little response to the upgrade. The lackluster response surprised traders and led analysts to question whether ETH still has a real chance of climbing 22% to retake the $2,200 level.
The ETH futures premium has remained below the 5% neutral threshold, indicating a lack of appetite from leveraged bulls. More significantly, this indicator was unchanged at 3% after the Pectra upgrade, suggesting traders did not adjust their positions despite the upgrade’s successful deployment.
The subdued response can be partly explained by investors’ focus on macroeconomic issues, as recession risks arise amid uncertainty in global trade disputes. But traders’ lack of interest in Ether predates the recent worsening of risk aversion conditions. In fact, ETH underperformed the broader cryptocurrency market capitalization by 28% in the first three months of 2025.
The lackluster price impact following the Pectra upgrade reflects broader dissatisfaction, as competing blockchains have gained traction.
Historically, high Ethereum base layer fees may have limited network activity, but these costs have dropped below $1 since mid-February. Additionally, Ethereum’s leading layer-2 solution, Base, currently boasts 10.3 million monthly active users-far fewer than Solana’s 82.2 million and BNB Chain’s 25.9 million, according to Token Terminal data.
Ethereum lags in DApp interoperability — Will it hurt ETH price?
Solana has dominated the decentralized exchange sector, particularly in token launches, by offering an integrated user experience. Similarly, Hyperliquid has exceeded expectations in perpetual futures trading, demonstrating that traders’ primary focus is not necessarily on Ethereum’s decentralization and security. Meanwhile, Tron has made significant inroads in the stablecoin market.
Ethereum’s leadership in total value locked (TVL) remains undisputed at $53.7 billion. However, this has provided little benefit to ETH holders, as network fees have been relatively low at $19 million over the past 30 days, according to DefiLlama. For comparison, Tron has amassed $51.8 million in fees in the same period, while Solana has accrued $39.4 million.
Noam Hurwitz, head of engineering at Alchemy, noted that Ethereum blob fees have dropped to their lowest possible level since the Pectra upgrade. For Hurwitz, Ether’s success depends on base layer scalability, including further improvements in the rollup mechanism, and ultimately, a more seamless user experience.
Related: Standard Chartered predicts BNB will more than double in 2025
Bridging assets and data across Ethereum’s layer-2 ecosystem has long been a challenge, while users on Solana and BNB Chain can easily switch between multiple decentralized applications (DApps). The Pectra upgrade, while a step in the right direction, does not resolve this issue, which explains why ETH has been unable to reclaim the $2,200 level seen in early March.
For Ether’s price to climb 22% from its current $1,810 level, investors likely need reassurance that the network’s progress, whether through deposits or layer-2 growth, translates into clear benefits. Ultimately, improved staking yields or stronger incentives are needed to drive broader adoption of DApps, which in turn would generate increased demand for ETH within the ecosystem.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
