Ethereum Surges 22% in One Day, Ethereum Guards Stand Up

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2025-05-09 10:22

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In the past 24 hours, Ethereum finally defied expectations and, following the just-concluded Pectra upgrade, surged by 22%, reclaiming the $2200 mark. Additionally, in the same period, various altcoins such as Virtual, EIGEN, and SUI experienced around a 50% increase.

Compared to the 22% surge of other altcoins, Ethereum's surge may seem less impressive. However, the last time Ethereum surged by over 22% in 24 hours dates back to May 23, 2024, when ETH's price rose from around $3,100 to nearly $3,900, marking a roughly 25% increase. The primary reason for that surge was the news of the SEC approving a physically-backed Ethereum ETF. So, what is the reason behind this latest rapid surge?

In the past 24 hours, 200,000 people globally were liquidated, with significant losses incurred by the BTC and ETH short positions. This colossal amount of liquidation fueled the bulls' rally, resulting in a collective loss of $679 million in a single day. The largest liquidation occurred in the Binance BTCUSDT pair, totaling $11.9692 million.

Incomplete Sentiment

Even as Bitcoin's price broke through $100,000, the Bitcoin Fear and Greed Index remains at a low level of around 70. In contrast, in December of last year and January of this year, when Bitcoin's price exceeded $100,000 and was preparing to break its all-time high, the index surpassed 80. This continued bullish sentiment in the market may also be one of the reasons for the market choosing to favor mainstream coins.

Pectra Upgrade

On May 7, 2025, Ethereum completed its first major upgrade post-Cancun—the Pectra upgrade. During the live stream of the upgrade, all core participants revealed delightful smiles, much like today's Ethereum holders.

Encompassing the Prague hard fork for the execution layer and the Electra optimization for the consensus layer, a total of 11 EIPs were introduced. Key improvements include raising the validator staking cap from 32 ETH to 2048 ETH (EIP-7251), enhancing Blob data processing capabilities (EIP-7691), and optimizing call data cost (EIP-7623).

The Blob count has doubled to 6, with the theoretical TPS increasing to 500. Subsequent Fusaka upgrades and DAS technology are expected to achieve even greater scalability. Despite the rapid development of L2, Vitalik points out that L1 performance is still the foundation for decentralization and asset interaction. Furthermore, through EIP-7002, validators can securely exit the mainnet without hotkeys, enhancing the system's security and stability.

While the market has raised concerns about increased centralization after the upgrade, the Pectra upgrade has indeed laid a foundation for Ethereum with high performance, strong security, and low cost, preparing it for the "new" Ethereum era for subsequent large-scale applications.

US-UK Trade Agreement

On May 8, Trump announced in the Oval Office of the White House that the United States had reached a new trade agreement with the United Kingdom, partially rolling back tariffs in specific areas but retaining 10% of "reciprocal tariffs" on the surface. Although it leans more towards a basic framework, this is the first agreement Trump has reached with a "major country" after initiating "reciprocal tariffs" on all countries globally.

According to Arkham's report, an on-chain address "0x175e7023e8Dc93D0c044852685ac33e856B577b4" received $10 million worth of USDT from a wallet associated with Zixipay, leveraged long ETH at the announcement of the US-UK Trade Agreement, and opened multiple long positions during ETH's recent rally.

The position of the ETH-USD contract pair at this address has now reached nearly $40 million, with a current floating profit of approximately $4.5 million.

Market Outlook

Renowned Crypto Youtuber, Crypto Rover, believes that Ethereum is currently in a highly underestimated state and has provided the chart below. The current ETH/BTC MVRV ratio and price are at historical lows; in similar past stages, the "green area in the chart" often accompanied ETH's price rebound or relative strength cycle.

Raoul Pal, CEO and founder of Global Macro Investor, is relatively optimistic, stating that the current market has a "fruity feel." While there may be brief and intense correctional fluctuations, the trend should continue until around August. He also advises the market to "enjoy the fruit rationally" and does not believe August is the peak of this cycle. However, the second phase of the pullback should occur in August, followed by either a bear market or the final round of uptrend leading to 2026.

Renowned researcher CryptoAmsterdam has released a trend range chart for ETH similar to Bitcoin's, believing that by using Bitcoin's chart as an analogy, if ETH can successfully hold above this $2000 "low point," ETH will bring about an Alt Season in the market.

Meanwhile, Crypto Predictions' "Crypto_Twittier" believes that although ETH has now broken through the downtrend, it will encounter an ETH resistance point at $2196 before AltSeason, and AltSeason will only come after this breakout pullback.