Topping the Douyin hot search list, has E Guardian really turned things around this time?

Author: Loyal E Guardian Scof, ChainCatcher

Editor: TB, ChainCatcher

"What happened to Ethereum with a 40% surge in 3 days?" This topic recently surged to the top of Douyin's hot list, sparking heated discussions. The rapid price increase ignited market sentiment and led many to start dreaming of a bull market return. However, a single rally does not equate to the start of a new cycle. Looking back at the context and sorting through the logic, we should be asking: Is this rebound driven by emotions, or is it a trend reversal?

Strong Rebound Ignites Market, Resonance of Emotion and Structure

Starting in early May, Ethereum's price rose continuously, breaking through $2,500 from around $1,800, with a surge of over 40% in just three days. This round of increase is not only a price recovery but also an emotional explosion. In the previous months, ETH's performance was weak, and market confidence was low, but this wave of market activity seemed to ignite investors' enthusiasm overnight.

Douyin, Twitter, and KOL analyses flooded in, with voices ranging from "the bull market is here" to "the whales are pulling the market." However, unlike previous surges purely driven by market expectations, this increase is compounded by multiple factors such as technical upgrades, ETF discussions, and macroeconomic benefits, forming a structural resonance.

On-chain data shows that funds are gradually flowing out of exchanges and into staking or long-term holding accounts. The staking ratio of Ethereum has exceeded 28%, with most positions built at lower levels, indicating a long-term bullish outlook. Additionally, the number of ETH locked in ETFs is continuously increasing, and although the proportion remains small, its symbolic significance for confidence is evident. Emotions are heating up, funds are flowing, and the ecosystem is recovering; this rebound is not just a simple "call to action."

Pectra Upgrade and Policy Signals, Building Fundamental Support

The core background of this rebound is that the Ethereum mainnet completed the Pectra upgrade on May 7, marking the most significant technical change since the "Merge." It introduced a higher staking cap, account abstraction, and data processing optimizations, lowering the usage threshold while enhancing verification efficiency and L2 operational space. More importantly, these changes improved user experience and provided more flexibility for institutions and developers.

On the eve of the upgrade, Vitalik published a blog stating that in the next five years, Ethereum will be simplified to be as "understandable and usable" as Bitcoin. Meanwhile, the foundation has also completed an organizational restructuring, with the new leadership team emphasizing "communication" and "real user value," shifting the focus from technology-centric to user-oriented. These changes indicate that Ethereum is trying to shed the impression of technical complexity and unclear direction, redefining its core advantages.

On the other hand, the expectations for Ethereum ETF staking are heating up. BlackRock's discussions with the new SEC chairman have sparked external expectations for the formal inclusion of staking features in ETFs. Although the SEC has not yet made a statement, the Hong Kong market has already opened up staking ETFs, indicating a shift in institutional policies. The softening of policies, institutional communication, and infrastructure improvements collectively form the fundamental support for this round of increase.

On-chain fund movements also provide a more intuitive perspective. From May 8 to 11, asset management company Abraxas Capital withdrew approximately 185,309 ETH from centralized exchanges, totaling about $399 million. Just a few days prior, the institution had also withdrawn 138,511 ETH, worth over $290 million. In just one week, their total accumulation approached $700 million. This concentrated buying period coincides highly with the timing of ETH's technical upgrade and the heating expectations for ETF staking; although the motivations are unclear, the proactive actions of institutions have already released positive signals.

What Should E Guardians Focus on Next?

Moving forward, what truly determines whether this market trend can be sustained is not how much it has risen, but how much it can retain. For "E Guardians," the most important focus right now is not where the next peak is, but whether these key changes can be realized—after the Pectra upgrade, is the network really more user-friendly? Are wallet interactions, new user onboarding, and developer experiences significantly improved? Ethereum does not lack technology, but history tells us that if upgrades cannot translate into real user retention and active development, it is merely a victory at the code level.

Another aspect that cannot be ignored is the pace of the ETF staking mechanism's advancement. BlackRock's actions have already provided sufficient hints, but a definitive statement has yet to arrive. When will the U.S. follow Hong Kong, and what does it mean for ETH? This is a window period for observing policy tendencies. At the same time, don't forget to monitor on-chain fund movements: Are exchange balances continuing to decrease? Is the staking volume still steadily increasing? These are the true reflections of real confidence.

Two additional aspects may determine whether ETH can carve out an "independent market" profile: one is whether there are signs of overheating in the futures market, as soaring funding rates often indicate that short-term risks are beginning to accumulate; the other is whether it has truly established itself as a "financial-grade infrastructure." In the context of the global stablecoin and RWA explosion, only systems like Ethereum that possess high availability and resistance to attacks can potentially become the underlying platform for trillion-dollar assets. Compared to frequently crashing new public chains, Ethereum's technical resilience, consensus mechanism, and global developer base are its greatest strengths in entering national-level financial layouts. Coupled with AI, which will drive exponential growth in on-chain interactions, ETH is also becoming a dual beneficiary of AI + Crypto.

Whether a Bull Market is Established Requires Clearer Validation

Although the current data is favorable, whether Ethereum has truly entered a bull market cannot be hastily concluded. On one hand, technical indicators suggest that the market may be overheating in the short term, with the RSI at a high level and some futures positions showing signs of correction pressure. On the other hand, based on historical experience, Ethereum has often experienced "buy the rumor, sell the news" market behavior after upgrade benefits, and technological advancements do not always lead to sustained price increases.

Moreover, Ethereum itself faces structural challenges. Although Layer 2 scaling has improved efficiency, it has also weakened the trading activity on the mainnet, impacting ETH's revenue model. Competitors like Solana pose substantial threats in terms of speed, costs, and user experience. While the diversity of the ecosystem is an advantage, the complexity of governance and slow decision-making also weaken execution power.

It is worth noting that while there was a slight net inflow into BTC ETFs yesterday (about $5.2 million), ETH ETFs experienced a net outflow of about $17 million. Nevertheless, ETH's price movement was not affected; instead, it continued to rise independently, decoupling price from fund flows, leading to market speculation about "whale changes" or even "Asian market dominance." Although this assertion is not yet conclusive, ETH is demonstrating an increasingly independent trend logic from BTC.

More importantly, ETH's current movement is still strongly influenced by the macro market. Expectations of Fed rate cuts, a rebound in small-cap U.S. stocks, and a strong rebound in Bitcoin have collectively created a favorable external environment for ETH. Data even shows that the correlation between ETH and the Russell 2000 has significantly increased recently. This indicates that ETH's current rise may be part of a broader "sector rotation" among risk assets rather than an independent bull run.

Conclusion

Ethereum is at a delicate tipping point. It is undergoing transformation, with technological updates, institutional loosening, and ecosystem restructuring all in progress. However, whether it can enter the bull market corridor still requires more time and factual validation. In the short term, this resembles more of a structural repair market. A true bull market needs sustained capital inflows, a clearer policy environment, and whether Ethereum itself can fulfill its transformation promises.

The market has set an expectation, but whether "E Guardians" can truly turn the tide depends on whether ETH can go further and stand more firmly.