Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000

Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000

BeInCryptoBeInCrypto2025/05/08 02:10
By:Abiodun Oladokun

Ethereum's Pectra upgrade is causing a surge in network activity, tightening the circulating supply and increasing ETH's price potential. Depending on future market trends, ETH could hit $2,000 as demand rises or face price fluctuations.

Ethereum’s highly anticipated Pectra upgrade went live yesterday and is already beginning to impact the network’s supply dynamics. On-chain data reveals a sharp dip in the coin’s circulating supply, now at an 18-day low.

This supply crunch is driven by a surge in user activity in the Layer-1 (L1) network over the past day. If this trend continues, ETH’s price could rocket to new highs. 

Ethereum Supply Hits 18-Day Low 

According to Ultrasoundmoney, ETH’s circulating supply has dropped since Ethereum’s Pectra Upgrade was implemented on Wednesday. As of this writing, it stands at an 18-day low of 120.69 million ETH.

Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000 image 0ETH Circulating Supply. Source: Ultrasoundmoney

This long-awaited network overhaul, which raises validator limits to 2048 ETH, enables smart wallets and boosts network efficiency, has fueled a spike in network activity, tightening ETH’s supply as user demand climbs.

Glassnode data shows Ethereum’s active address count has climbed to a 30-day high, signaling renewed user engagement. According to the data provider, on May 7, the number of unique addresses active in the network, either as a sender or receiver, totaled 474,044.

Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000 image 1ETH Number of Active Addresses. Source: Glassnode

When Ethereum’s active address count increases, more unique wallets interact with the network. The surge in user activity signals growing demand and network usage, and it often correlates with higher gas fees and increased ETH burning.

This is because with more users on the network, more transactions flow through the network, triggering higher gas fees and accelerating the ETH burn rate. According to Etherscan, ETH’s burn rate is at its highest level since May began.

Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000 image 2Daily Ether Burnt. Source: Etherscan

As more ETH coins are burned, the circulating supply lessens, increasing the upward pressure on the altcoin’s price. 

Will It Reclaim $2,000 or Retreat to $1,744?

On the daily chart, ETH trades above the horizontal channel, which kept its price within a range between April 23 and May 7. The altcoin faced resistance at  $1,872 during that period and found support at $1,744. 

If the breakout continues, ETH could reclaim the psychological $2,000 price zone and continue its rally toward $2,235.

Pectra Upgrade Spurs Ethereum Network Activity, Pushing ETH Closer to $2,000 image 3ETH Price Analysis. Source: TradingView

However, a failed retest of this breakout could cause ETH’s price to fall to $1,744. If it fails to hold, the price could drop to $1,564.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!