Ethereum has finally stepped out of Bitcoin’s shadow with a significant breakout, surging past $2,600—its strongest move since February. This rally followed the PECTRA upgrade, which was initially met with lukewarm sentiment and price stagnation, only to surprise markets with a delayed upside explosion. Social volume around Ethereum skyrocketed 44% this week, indicating renewed interest from both retail and institutional investors. 

Despite being historically overshadowed by faster-moving altcoins like Solana and Chainlink, Ethereum’s “mini pump” stands out as a decoupling event, marking a rare moment of outperformance relative to the broader market. This shift in sentiment, especially following months of underperformance, could signal the beginning of a new accumulation phase and sustained momentum.
Since hitting a local low of just under $1,800 on May 7, Ethereum has surged by an impressive 44%.

Today’s write-up dives deeper into the fresh momentum, Pectra upgrade, crowd sentiment shifts, and what’s brewing beneath the surface. Let’s dig in 

Ethereum’s Pectra upgrade is live

Ethereum just rolled out its most powerful network upgrade since the Merge in 2022 - and it’s a big deal. The Pectra upgrade, which went live last week, combines two major improvements (Prague for the execution layer + Electra for the consensus layer) into one feature-rich release. For everyday users, the highlight is EIP-7702, which gives regular wallets the ability to temporarily act like smart contract wallets—without needing to migrate or get technical. 

This opens the door to smoother dApp usage, cheaper gas, bundled transactions, and easier wallet recovery. Simply put, it makes Ethereum far more user-friendly. Meanwhile, improvements to roll-up support mean lower fees and better performance on popular Layer 2 chains—right when retail activity is heating back up.

Behind the scenes, developers also benefit from smoother tooling and stronger security standards. Pectra lays the technical foundation for Ethereum’s next wave of adoption, retail and institutional alike.

Ethereum FUD hits highest level

The blue bars in the chart below represent bearish price calls on Ethereum across social media, while the red bars represent bullish calls predicting a surge toward $3,500–$5,000. On May 6–7, bearish sentiment spiked to its highest level of 2025, as ETH lagged the broader market and retail traders grew frustrated, assuming once again that Ethereum had missed the party. But that pessimism was quickly punished. 

Social Volume tracked by Santiment; Source: Santiment on X

As ETH crossed the critical $2,000 level on May 8, sentiment did a full u-turn - and the very same crowd that was expecting a breakdown started predicting sky-high price targets. This whiplash in social volume reveals how reactive crypto sentiment can be - and why it often lags price action. Importantly, the rally wasn’t accompanied by extreme euphoria, which suggests there's still room to run. When the crowd turns bullish after the breakout, not before - it often means the trend still has momentum.

Gas Fees, FOMO & the tipping point for ETH

Another metric worth watching closely is Ethereum’s transaction fees. One of the longstanding critiques of ETH is that it becomes too expensive to use when activity surges -often leading to congestion and rising gas fees. This creates a sort of feedback loop: high usage leads to higher costs, which discourages activity, causing fees to drop again when traffic dies down. 

At the moment, though, we’re still in a low-fee window - just $0.84 per transaction on average, a huge drop from the $7+ fee levels seen six months ago. This suggests that Ethereum's recent surge hasn't yet reached a saturation point in network demand. But if we see gas costs creep back toward $2, it may signal that the current rally is topping out.

Average fee for transactions in Ethereum blockchain; Source: Santiment on X

From a risk perspective, the 30-day MVRV (Market Value to Realized Value) for ETH is now sitting at +32.5%, well above the +15% threshold where caution is usually warranted. This doesn’t guarantee a drop, but historically, it indicates that a cooling-off period is likely as overextended gains get digested. 

Over $2.5 billion in ETH withdrawn from exchanges

Roughly 1 million ETH; valued at over $2.5 billion - has been withdrawn from centralized exchanges over the past month, with nearly half of that activity occurring in just the last week. This trend often reflects a move toward self-custody, which can reduce immediate selling pressure. Alongside this, several large holders - including investment firms like Abraxas Capital have reportedly increased their ETH exposure. While these developments signal notable accumulation and reduced exchange supply, it's worth watching how these trends evolve, especially as ETH approaches key resistance levels.

Source: Ali in X

From a technical standpoint, Ethereum’s Relative Strength Index (RSI) is hovering around 70, a level typically associated with overbought conditions. This suggests the recent rally may be running hot, with limited short-term upside unless momentum continues. Historically, RSI above 70 often precedes cooling-off periods or minor pullbacks, especially when paired with rising crowd optimism. While not a standalone sell signal, it does point to elevated risk for fresh entries at current levels.

ETH RSI is overbought. Source: Trading View

Ethereum's recent surge has pushed its 30-day MVRV (Market Value to Realized Value) to over +32%, a level that typically signals profit-taking risk. This means traders who bought ETH in the past month are sitting on hefty gains-and historically, this kind of setup often leads to a short-term cooldown.

On the flip side, the 365-day MVRV is still slightly negative, suggesting that long-term holders are just now approaching break-even levels and may be less inclined to sell. This contrast paints a picture of a market that’s potentially overextended in the short term but still has room to run over a longer horizon-if demand holds steady.

30-day and 365-day MVRV Ratio; Source: Santiment on X

Takeaway: A strong run, but some heat under the hood

Ethereum has had a strong couple of weeks, backed by technical upgrades, improving sentiment, and notable outflows from exchanges. But some caution is warranted here. On-chain metrics like MVRV and RSI suggest the asset may be overheated in the short term, with a possible cooldown on the cards. Long-term fundamentals continue to improve, but for those looking to enter fresh positions, waiting for better entry points could offer more favourable risk-reward. We'll be monitoring its price action in the next few weeks closely.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.