Ethereum rose from around $1,800 to $2,500 last week as risk appetite returned to digital assets amid ralliving nearly 40%, alleviating trade tensions and reducing major network upgrades.
Analysts say further benefits could depend on a stronger foundation, but the rally attracted renewed interest in Ethereum.
President Donald Trump’s announcement of constructive talks with China, along with limited trade deals with the UK, helped drive macro optimism, lifted traditional stocks on Monday.
The Dow, S&P 500 and Nasdaq recorded the largest daily profits in months led by technology and industrial stock strength.
However, digital assets have not been able to maintain recent momentum. Bitcoin, Ethereum and Solana all declined, noting that analysts would benefit after a sharp rebound last week.
“There is no doubt that the recent rebounds of Bitcoin, Ethereum and Solana reflect new market optimism,” James Toledano, Chief Operating Officer of Unity Wallet, told Decrypt.
“But I believe this will be a blank rebound, as this is based on the emotions and political movements of one man,” he added. “Anyone who is serious about code would like the fundamentals to be the driving force.”
That skepticism is reflected in the ETF flow. The Bitcoin Spot ETF recorded a net inflow of $600 million last week, while the Ethereum ETF saw a $55 million outflow.
“The scale and strength of the price recovery, coupled with the slightest leak from Ethereum ETFS, suggests that crypto output investors have driven primarily a surge, rather than facility inflows.” Decryption.
The Pectra upgrade of Ethereum, released on May 7, has become an important catalyst for raising interest in crypto, analysts say.
The upgrade has improved staking restrictions and wallet ease of use, among many other quality of life updates.
“The Eth Pectra upgrades were made public without any issues, and increased confidence in their ability to pave the way for further institutional adoption of Ethereum,” said Sean Dawson, head of research at Derive.xyz. Decryption.
Derive’s model has allocated a 20% chance that Ethereum will surpass $4,000 by Christmas, starting from 9% last week. Volatility metrics also suggest that assets could remain more responsive than Bitcoin for the last few months.
Still, Toledano said: “Without sustainable institutional momentum and further clarity in regulations, integration could be seen before a new all-time high is tested.”
