Ethereum Price Rally Tests Staying Power as Analysts Eye Fundamentals Over Hype

Ethereum rallied nearly 40% last week, climbing from around $1,800 to $2,500, as risk appetite returned to digital assets amid easing trade tensions and a major network upgrade. 

The rally has drawn renewed interest in Ethereum, though analysts say further gains may depend on stronger fundamentals.

U.S. President Donald Trump’s announcement of constructive talks with China, alongside a limited trade agreement with the U.K., helped drive macro optimism, lifting traditional equities on Monday. 

The Dow, S&P 500, and Nasdaq posted their largest one-day gains in months, led by strength in tech and industrial stocks.

Digital assets, however, failed to sustain recent momentum. Bitcoin, Ethereum, and Solana all declined on the day, with analysts pointing to profit-taking after last week’s sharp rebound.

“There can be no doubt that the recent rebound in Bitcoin, Ethereum, and Solana reflects renewed market optimism,” James Toledano, Chief Operating Officer at Unity Wallet, told Decrypt.

“However, I do believe this could be a hollow rebound, as it is based on sentiment and the political moves of a single man,” he added. “Anyone who is serious about crypto would prefer that fundamentals are the driving force.”

That skepticism is being echoed in ETF flows. While Bitcoin spot ETFs recorded $600 million in net inflows last week, Ethereum ETFs saw $55 million in outflows. 

“The scale and strength of the price recovery, combined with modest outflows from Ethereum ETFs, suggest that crypto-native investors, rather than institutional inflows, have primarily driven the surge,” Matteo Greco, research analyst at Fineqia International, told Decrypt.

Ethereum’s Pectra upgrade, which went live on May 7, has been a significant catalyst driving renewed interest in the world’s second-largest crypto, analysts say.

The upgrade, among many other quality of life updates, improved staking limits and wallet usability.

“The ETH Pectra upgrade went live without issues, increasing confidence in Ethereum’s ability to scale and paving the way for further institutional adoption,” Sean Dawson, Head of Research at Derive.xyz, told Decrypt.

Derive’s models now assign a 20% probability that Ethereum will surpass $4,000 by Christmas, up from 9% last week. Volatility metrics also suggest the asset could remain more reactive than Bitcoin in the months ahead.

Still, Toledano noted: “Without sustained institutional momentum and further clarity on regulation, we may see consolidation before any new all-time highs are tested.”