Ethereum is about to undergo the Pectra upgrade tomorrow, and data shows validators are staying put, reflecting strong confidence despite recent price struggles. With the drop in exits and a positive funding rate, traders are optimistic. However, fears of a possible sell-off exist if the upgrade does not meet expectations, which may push prices lower.
Ethereum is gearing up for its much-anticipated Pectra upgrade tomorrow, and on-chain statistics reveal that validators are bracing for what may come. Despite ETH’s rather disappointing price movements recently, a notable reduction in validator exits indicates a strong sense of confidence among network participants.
According to data from Glassnode, there’s been a marked decrease in the number of validators voluntarily exiting Ethereum since May 1. On May 5, only 238 validators chose to exit, which is the lowest daily figure since April 5. This trend shows that many validators prefer to remain in the network instead of liquidating their staked ETH, which signals long-term confidence in Ethereum itself.
The fewer exits suggest that Ethereum validators are feeling positive about the network’s short-term prospects and the Pectra upgrade’s potential. If this optimistic sentiment continues, it could set the stage for a rally in ETH after the upgrade takes place.
Contributing to the optimistic outlook, the funding rate for ETH continues to hover positively at 0.0027%. This indicates that traders are willing to pay a premium to maintain their long positions on ETH, signalling bullish trends. A positive funding rate suggests that buyers are outnumbering sellers in the futures market, highlighting traders’ expectations of an upward price trajectory.
Even though ETH has been struggling to break consistently above the $2,000 barrier, futures traders remain confident, making leveraged bets in hope of a price increase.
As Pectra’s launch approaches, the decrease in validator exits could also lead to a tightening of ETH’s circulating supply, potentially fueling a bullish trend after the upgrade. If this positive sentiment remains strong, we could see ETH’s price rise to around $2,027.
Nonetheless, there exists a risk of a “sell-the-news” scenario. If the upgrade fails to live up to market expectations or incites traders to take profits too quickly, ETH may face downward pressure. In that case, prices could potentially dip to around $1,744—despite the generally encouraging trends observed from validators’ behaviour.
