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Despite the successful implementation of the Pectra upgrade, the price of Ethereum (ETH) has seen only a modest increase, leaving many investors wondering what’s holding back its performance. On May 7, the day of the upgrade, ETH opened at $1,849 and closed at $1,811, reflecting a slight 2% decline. As of now, ETH is trading at $1,936, marking a mere 5% gain since the upgrade’s launch.

Why Has Ethereum’s Price Stagnated?

The muted market response can be attributed to a combination of macroeconomic factors and Ethereum-specific challenges. On a broader scale, uncertainties in global trade, such as the ongoing tariff conflicts, have created headwinds for financial markets, including cryptocurrencies.

However, Ethereum’s underperformance isn’t solely due to external factors. In recent months, ETH has consistently lagged behind other layer-1 blockchain networks in key metrics, particularly user growth. This has raised concerns about its ability to maintain its competitive edge in the rapidly evolving crypto landscape.

Declining User Activity: A Concern for Ethereum

From July 2023 through April 2025, Ethereum’s active addresses—an essential indicator of network utility—have fluctuated between 400,000 and 600,000. This is a stark contrast to competitors like Tron (TRX), which has seen active addresses surge to over 2.5 million, and Ton (TON), which peaked at 3.6 million active addresses. These figures highlight Ethereum’s struggle to attract and retain retail users, a key demographic for driving network activity and, ultimately, price growth.

While Ethereum still leads in Total Value Locked (TVL), with $52.6 billion secured on its platform, this metric primarily reflects institutional trust in its security and long-term viability. However, the lower activity levels among retail users suggest reduced demand, which is often a critical driver of bull markets.

What Does the Pectra Upgrade Bring to Ethereum?

The Pectra upgrade introduced several significant improvements to the Ethereum network, including lower blob fees and enhanced wallet usability. These changes are aimed at improving the overall user experience and reducing transaction costs. However, despite these enhancements, the upgrade has not addressed a major challenge facing Ethereum: the difficulty of bridging assets and data across its fragmented Layer 2 ecosystem.

Layer 2 solutions, designed to improve scalability and reduce fees, have become an integral part of Ethereum’s ecosystem. However, the lack of seamless interoperability between these solutions remains a barrier to user adoption. For Ethereum to regain its momentum, it must focus on simplifying the bridging process and fostering a more cohesive ecosystem.

What’s Next for ETH Price?

For Ethereum’s price to see significant growth, investors are likely looking for clear signs of increasing network adoption, particularly in terms of user activity. While institutional trust, as evidenced by its high TVL, is a positive sign, retail interest and user engagement are crucial for driving long-term value. Bridging solutions may hold the key to unlocking Ethereum’s full potential and attracting a broader user base.

As the cryptocurrency market continues to evolve, Ethereum must address these challenges to maintain its position as a leader in the blockchain space. Investors and enthusiasts alike will be watching closely to see how the network adapts in the coming months.

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