Ethereum (ETH) Price: Will Pectra Upgrade Spark the Next Rally Above $2,000?
TLDR
Ethereum price has recovered to $1,817 after dipping to $1,737 on April 30
The upcoming Pectra upgrade on May 7 will enhance scalability, user experience, and staking efficiency
Technical indicators show a Dragonfly Doji pattern, potentially signaling a bullish reversal
ETH is retesting its long-term parabolic support zone, historically a launching pad for fresh uptrends
The MVRV Z-Score suggests Ethereum may be undervalued at current price levels
Ethereum has shown resilience in the cryptocurrency market by reclaiming the $1,817 price level on May 1, 2025, after experiencing a significant dip to $1,737 the previous day. This recovery comes as the market anticipates the upcoming Pectra upgrade scheduled for May 7, which many analysts believe could trigger a decisive bullish rally.
The price movement on April 30 was marked by volatility. ETH started the day with a brief rise but soon formed a pin bar followed by a full-body red candle, signaling a potential downtrend. A Death Cross on moving averages at 01:05 UTC confirmed this bearish sentiment.
Later in the day, ETH found support at $1,790 and moved in an upward channel, only to face resistance at $1,812. By noon, another bearish pattern emerged, pushing the price to its low of $1,737.
Source: TradingView
The tide began to turn when an RSI Oversold condition occurred at 13:50 UTC, hinting at a potential reversal. As predicted, the price found support at $1,737 and began an uptrend, confirmed by a Golden Cross on MACD.
The Pectra Catalyst
The Pectra upgrade, set to launch on May 7, is generating excitement among Ethereum enthusiasts. This update will introduce 11 Ethereum Improvement Proposals (EIPs) focused on three key areas: scalability through layer-2 solutions, user experience improvements, and staking efficiency.
EIP-7702 in Ethereum’s Pectra upgrade introduces smart wallet-like functionality to EOAs—enabling gas sponsorship and batch transactions similar to what Paymaster offers today.
Watch @Dav1dDuong and @MurrLincoln explain how these upgrades support smart wallet adoption. https://t.co/VBQ3Bi7DCm
— Coinbase Developer Platform🛡️ (@CoinbaseDev) April 29, 2025
One of the most notable improvements is EIP-7702, which will allow conventional user wallets to temporarily function as smart contracts. This opens up capabilities such as using tokens other than ETH for gas fee payments and fee sponsorship.
These developments could lower entry barriers for non-technical users, especially in gaming, payments, and mobile apps where poor user experience has hindered mainstream adoption. Importantly, these changes won’t diminish ETH’s fundamental role in the network, as validators will still pay fees in ETH at the protocol level.
The staking improvements are also drawing attention from institutional players. Validators will soon be allowed to stake up to 2,48 ETH, up from the current 32 ETH maximum, and both onboarding and exit procedures will be streamlined.
These changes could reignite institutional interest in Ethereum, potentially locking more ETH in validator nodes and reducing the circulating supply.
Technical Signals Point to Potential Rally
From a technical perspective, several indicators suggest Ethereum may be forming a bottom. Most notably, ETH has formed a monthly Dragonfly Doji candlestick pattern—the same formation that preceded its massive 25,000% climb during the 2017 bull cycle.
This pattern, characterized by a long lower wick with little to no upper wick and a close near its opening level, typically indicates rejection of lower prices and possible recovery of bullish momentum.
Ethereum is also retesting its long-term parabolic support zone, which has historically served as a launching pad for new uptrends. As one researcher noted, “In every cycle, this zone triggers a reversal — and this time is no different.”
On-chain data further supports the case for an Ethereum comeback. The MVRV Z-Score, a key indicator of market tops and bottoms, has returned to its historical accumulation zone. In past cycles, entries into this zone corresponded with market bottoms in late 2018, March 2020, and mid-2022—all of which preceded notable rallies.
This metric suggests that Ethereum may be underpriced at current levels, offering a favorable entry point for investors.
While derivatives market data shows some caution among professional traders, options market data indicates growing comfort with ETH’s current value. Put options, which reflect less concern about further downside risk, are now trading at levels comparable to call options.
Technically, ETH appears poised for a move above the critical $1,840 resistance level. A successful breakout could open the path toward $1,920, with the potential to reach $2,000 in the near future. However, failure to surpass $1,840 might lead to a retest of support at $1,760 or possibly $1,735.
As Ethereum continues to lead in total value locked (TVL) with a market capitalization of around $217 billion, the upcoming Pectra update aims to address competitive shortcomings and strengthen its position against rivals like Solana, BNB, Cardano, and Tron.
The price currently shows strong bullish sentiment, and if Ethereum breaks key resistance, it could reach new highs. However, a failure to break through could result in a sharp decline.
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Filed under: News - @ May 1, 2025 8:24 am