Ethereum is gearing up for the Pectra upgrade on May 7, which aims to enhance staking efficiency and user experience, potentially driving demand for ETH. The token has been underperforming in the current bullish market, trading at $1,813, a 56% decline from its December 2024 peak. The Pectra upgrade introduces Ethereum Improvement Proposals (EIPs), including EIP-7702, which enables regular user wallets to function like smart contracts, allowing for fee sponsorship and alternative token payments for gas. This could lower barriers for new users and developers. Additionally, EIPs 7251, 6110, and 7002 will allow validators to stake up to 2,048 ETH, smoothing onboarding processes and attracting institutional interest. The potential for a revived demand and reduced supply through locked-up staking may exert upward pressure on ETH's price. Despite previous upgrades failing to sustain momentum in adverse market conditions, the current market cycle is optimistic, echoing the successful upgrades in 2021. As optimism builds around Pectra, Ethereum aims to regain its market position and possibly spur a significant price recovery.

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