On May 7, the Ethereum network completed its Pectra upgrade. This upgrade was notable for including a number of Ethereum Improvement Proposals (EIPs), designed to improve the blockchain’s overall capabilities. The upgrade focuses on scaling, staking efficiency, user experience, and interoperability, with the goal of improving Ethereum's infrastructure and paving the way for Web3 innovations.

The Pectra upgrade brings several changes, which some analysts think might serve as a bullish catalyst for ETH. Ever since the announcement of the upgrade began to circulate news, the overall amount of staked ETH has skyrocketed. As a result, it’s gone up from 33.7 million to 34.4 million. This net inflow of 627,000 ETH seems to indicate that stakers of the network are increasingly confident in the direction of the network.

More transactions moving onto Layer 2 (L2) solutions would move activity off of Layer 1 (L1). Since L1 transactions historically burn more fees than L2 transactions, this causes ETH’s supply to go down.

For his part, RedStone’s Co-founder and COO Marcin Kazmierczak had a more sober take on the Pectra upgrade.

The long-term impact on Ethereum’s price remains difficult to quantify with precision. While there’s a positive correlation between increased blob space consumption and ETH burning (which reduces supply), these mechanisms don’t operate in ceteris paribus conditions. - Marcin Kazmierczak

Analyst Ted Pillows noted that ETH recently pierced a four-month resistance ceiling. This movement is sometimes seen as a precursor to a price rally in the coming days.

Ultimately, Ethereum navigates extraordinarily complex territory as it simultaneously advances L2 scalability, enhances L1 performance, and maintains ETH’s monetary soundness. This multifaceted challenge represents both a formidable technical dilemma and an exciting frontier in blockchain architecture. - Marcin Kazmierczak

The fact that there were heavy inflows into ETH staking might be an indication that institutional sentiment is changing.

As I said before, it’s time for ETH to rally now, and that will happen soon. - Pillows

Tracy Jin opined that the upgrade would result in a higher price for ETH.

This could mark the beginning of institutional positioning, or at minimum, a restoration of confidence post-upgrade. The scale of inflows isn’t explosive yet — but the direction has changed. - Kripto Mevsimi

The price of Ethereum is seeing a pre-price rally due to speculation around the Pectra upgrade. As such, it is predicted that most Web3 developers will probably migrate back to the Ethereum network post-Pectra upgrade.

Technically, a successful upgrade could trigger a bullish sentiment and breakout moment for ETH to move towards the $2,200 zone, potentially kickstarting another cycle of the altcoin season. - Tracy Jin

The Pectra upgrade has set the stage for a potential price rally for Ethereum. It is speculated that many Web3 developers may choose to return to the Ethereum network after the Pectra upgrade.