TL;DR Breakdown
- Ethereum trading volume has dropped significantly just before the launch of the Pectra upgrade.
- Despite the volume decline, Ethereum has gained 2.44 percent and is now trading at $1,838.
- The ETH to BTC pair has continued to weaken and remains under strong selling pressure.
- Ethereum tests resistance at the 50-day EMA, which could determine the next price direction.
- The Federal Reserve is expected to keep interest rates unchanged, which could slow down short-term crypto rallies.
Ethereum (ETH) trading volume has declined sharply ahead of the long-anticipated Pectra upgrade, which is set to launch today.
Ethereum has rebounded by 2.44% despite the slowdown, climbing to $1,838 as the broader crypto market recovers. Market participants now await technical signals and macroeconomic cues to determine Ethereum’s short-term direction.
ETH spot volume is cooling
“Ethereum spot volume is cooling off, and that might actually be a good sign… This could also potentially ease the selling pressure that’s been weighing on the market.” – By @Darkfost_Coc pic.twitter.com/xVXqT5oLry
— CryptoQuant.com (@cryptoquant_com) May 6, 2025
Ethereum Spot Market Sees Sharp Slowdown
Spot trading activity on Ethereum has weakened significantly, reducing the market’s recent volatility. Analysts suggest that the lower volumes during price recovery periods may decrease abrupt price swings. This development follows five months of sustained correction in Ethereum’s market performance.
Ethereum’s ETH/BTC pair has remained under pressure, registering one of its steepest drops in recent years. However, technical indicators suggest that Ethereum could prepare to challenge the 50-day EMA resistance. If successful, this may bring renewed momentum to the asset’s price movement.
Market watchers are also focusing on macroeconomic developments, including the upcoming Federal Reserve policy decision. The CME Fed Watch tool signals a 95% probability that interest rates will remain unchanged. This expectation limits short-term upside for risk assets, including Ethereum and other altcoins.
#Ethereum is sitting right at the level of “resistance” that I pointed out last week, as well as the “50 Day EMA”. Very critical levels!
Maybe Powell will have some good news for us on Wednesday that sends $Eth and the $Alts pumping.🤞
It’s time! 🚀 pic.twitter.com/mwLpZ0BYQE
— Anonymous | Crypto Predictions (@Crypto_Twittier) May 7, 2025
Ethereum Pectra Upgrade Launches with Major Changes
The Pectra upgrade, combining the Prague and Electra phases, introduces eleven Ethereum Improvement Proposals (EIPs) to the network. This marks Ethereum’s most substantial update since the beginning of 2024, aiming to improve scalability and user functionality. Among the changes are smarter wallets, improved staking, and streamlined development tools.
One of the leading proposals, EIP-7702, allows standard accounts to run smart contract code. This change supports more advanced wallet functions such as batch transactions and gasless operations. Additionally, EIP-7251 increases the staking limit for validators from 32 ETH to 2,048 ETH, optimizing large-scale staking.
The upgrade also supports more efficient rollups, contributing to faster and cheaper transactions across the network. Ethereum’s infrastructure is now better positioned to support future changes like Verkle Trees and EIP-4444. The technical updates focus on accessibility, performance, and forward compatibility.
ETH Awaits Breakout and Fed Decision
Ethereum’s price movement now depends on breaking key resistance levels and macroeconomic developments. A confirmed breakout above the 50-day EMA could drive further upward movement. Conversely, failure to sustain recent gains may result in renewed downside pressure.
The upcoming Federal Reserve meeting may impact liquidity flows across digital asset markets. If interest rates stay unchanged, as expected, crypto assets might see slower growth in the near term. Meanwhile, technical improvements from the Pectra upgrade may provide long-term support.
