As Solana's meme culture faces a setback and the Pectra upgrade is set for testing next week, market attention seems to be shifting towards Ethereum. Zhu Su, co-founder of Three Arrows Capital, suggests going all in on Ethereum.
Market Preparing for Pectra Upgrade
The term structure shows a noticeable kink around the March expiration, especially in ETH options, suggesting the market anticipates significant volatility around this time, possibly linked to Ethereum's expected Pectra upgrade in early April. Looking back at previous major upgrades like The Merge in September 2022, ETH exhibited a 'buy the rumor, sell the news' pattern with initial sharp rises followed by setbacks. Similarly, the Shanghai upgrade in April 2023 allowed for stake withdrawals with fears of selling pressure that were unfounded, leading to a 30% rise in ETH over the following months.
ETH Options Market Leaning Bullish
With the market discussion heating up, traders might be positioning for another volatility event. From March 28, the options market shows a bias towards bullish volatility, suggesting a potential new market narrative as the crypto market stalls. The general weakness in the altcoin market is adding pressure — with LIBRA collapsing, SOL and ETH dropping, and BTC dominance rising. For altcoins to recover, real-world applications and network efficiency improvements are needed beyond just market catalysts.
Drop in Transaction Fees as a Positive Signal
Santiment's latest observations note a rebound with Ethereum discussions and historically low exchange supply. The current average transaction fee for Ethereum has dropped to $0.41, a significant decrease from the $15.21 peak over the past two years. Low transaction fees typically indicate that the network is not overly congested, a positive signal for ETH's medium to long-term price movement. Santiment believes that such low fees could attract more users back to the network, potentially increasing activity and application value over time.
Ethereum is quickly recovering from a recent drop to $2605, currently trading at $2689.8. It is beneficial to watch the ETH/BTC and SOL/ETH trading pairs to assess Ethereum's strength against other cryptocurrencies.
