Ethereum’s Technical Milestone Sparks Cautious Market Optimism

Ethereum CRYPTO000ETH

Following a difficult November, investors in the world's second-largest cryptocurrency are seeing a potential turning point. The successful activation of the "Fusaka" upgrade on December 3 has introduced significant technical improvements to the Ethereum blockchain, fueling a tentative recovery in its price as the market assesses the long-term implications.

The Fusaka upgrade represents Ethereum's second major technical achievement in 2025. Its core innovation is the implementation of Peer Data Availability Sampling (PeerDAS). This change fundamentally overhauls how network validators handle transaction data. Rather than downloading entire, large blocks of data, validators can now verify small, random samples. This shift is projected to slash the required bandwidth and computational load by as much as 85 percent.

However, developers caution that the full scaling benefits will not be instantaneous. Ethereum Foundation developer Marius Van Der Wijden has tempered expectations for an immediate performance surge. To ensure network stability, the volume of data, or "blobs," will be increased only gradually. Consequently, the complete scaling effect is expected to unfold over the coming months.

Institutional Sentiment Shows Volatility

The initial market response to the upgrade was positive. On the day of activation, U.S. spot Ethereum ETFs recorded inflows of $140.2 million, marking their strongest single-day performance in over a month. Yet this optimism proved fleeting; investors withdrew nearly $70 million the very next day. This volatility highlights the persistent uncertainty among institutional participants.

Despite this mixed institutional flow, Ethereum's price has shown short-term strength. On a weekly basis, the asset has gained approximately 5 percent, with its current price at $3,168.29. This represents a noticeable rebound from its 52-week low of around $2,764, which was recorded in late November.

Technical Indicators Suggest a Cautious Outlook

From a chart analysis perspective, the picture remains complex despite recent gains. The price continues to trade about 7 percent below the key 50-day moving average, situated at $3,421.83. Furthermore, the Relative Strength Index (RSI) reading of 42.0 does not indicate overbought conditions but remains in neutral territory, suggesting room for further movement in either direction.

For a sustained bullish trend to take hold, Ethereum must demonstrate that the Fusaka upgrade translates into measurably higher network activity over the long term. The critical factors will be a smooth, complication-free increase in data throughput in the weeks ahead and the ability to rebuild consistent confidence among institutional ETF investors.