Ethereum Surges Double Digits to $2,400 Following Pectra Upgrade

Cryptocurrency

Summary:

Ethereum jumped nearly 29% to $2,400 following its major Pectra upgrade, which enhanced scalability and staking. The rise also followed easing trade tensions, boosting Ethereum-based tokens across the crypto market.

Ethereum surged by 28.9% from $1,939 to over $2,400 Friday morning, on the heels of the Pectra upgrade—which core developers called the “most ambitious upgrade” the network has ever implemented.

The second-largest cryptocurrency is currently trading at $2,339, up 20.4% on the day, per data from CoinGecko.

On Wednesday, Ethereum successfully rolled out its Pectra upgrade. This was the third significant upgrade since The Merge in 2022, in which the network moved from the proof-of-work consensus mechanism to proof-of-stake.

Pectra aims to improve the network’s user experience, scalability, and staking flexibility. This is being done by enabling account abstraction, tweaking data storage requirements, as well as increasing validator staking limits and allowing them more flexibility when withdrawing.

In the three months leading up to the Pectra upgrade, Ethereum had fallen 33.3% from $2,727 to $1,818 amid broader macro economic pressures with U.S. President Donald Trump’s trade war and heightened geopolitical tensions.

However, following Trump's signing of a trade deal with UK Prime Minister Keir Starmer on Thursday, the market started to rise, with Bitcoin quickly reclaiming $100,000. Soon after, Ethereum also reclaimed its $2,000 milestone, before rocketing to $2,400 on Friday for the first time since early March.

UK Treasury minister Darren Jones called the deal a “huge relief,” with the markets possibly taking it as a sign that global trade war tensions may be starting to ease.

Despite Ethereum’s rise in value, according to CoinGlass, Ethereum U.S. spot ETFs have seen three successive days of outflows, with the last day of positive inflows being a week ago.

The wider crypto market is up 3.5% to a total market cap of $3.37 trillion, according to CoinGecko data. The biggest winners out of the top 100 tokens by market capitalization are all Ethereum-based projects. Legacy meme coin Pepe (PEPE) has taken the top spot after rising 43.3% over the past 24 hours, followed by AI agent launcher Virtuals (VIRTUAL), up 24.3%, and decentralized exchange Uniswap (UNI), up 21.5% on the day.

Source: decrypt

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Adam

Economic

In early April, Big Money sold hard. Capitulation was the name of the game. Headlines were scary.

But afterwards, there was a run of consecutive green days for stocks. What should we make of this action?

Uptrends Due To Forced Buying

The early April action was forced selling. It typically occurs at market troughs.

Thankfully, capitulation usually doesn’t last long. And once it’s done, we often see near-term uptrends due to forced buying that starts a new market phase:

Forced Buying That Starts a New Market Phase_1

Above are the four circular phases of money flows. Early April was Phase 4 – no buyers and record outflows. But notice that extreme selling often ignites huge buying in Phase 1.

These phase shifts are moments of opportunity. And frequently, being on the opposite side of the crowd pays off.

See, rare capitulation tees up some of the best buying you’ll ever get as an investor. And as MAPsignals data keeps getting more constructive, forced buying could lead the next leg higher.

When The Crowd Dumps Stocks, Take the Other Side

Investors need to see through today to focus on tomorrow. As corny as that sounds, when you study data, it’s true. Let me show you some examples.

The first is 10 years of capitulation events:

Forced Buying That Starts a New Market Phase_2

You probably notice those deep red lines. But be sure to also see the big green shoots that follow, along with the smaller, sustained green patches that accompany the big spikes. Using the exchange-traded fund SPDR S&P 500 ETF Trust (SPY) as a proxy, the market rise is evident.

The lesson is when the crowd dumps stocks, take the other side.

Now let’s look at March 2020, right when the pandemic took full force. Relentless selling eventually vanished, paving the way for forced buying:

Forced Buying That Starts a New Market Phase_3

Notice the quiet period when capitulation stopped in late March. As outflows met inflows, there was a slight pause before the monster green wave of buying.

This repeatable pattern also happened in late 2018. It wasn’t as bad as the pandemic, but the pattern emerged nonetheless – capitulation, full stop, forced buying:

Forced Buying That Starts a New Market Phase_4

This pattern is happening now.

Early April capitulation hit and now we’re witnessing light flows:

Forced Buying That Starts a New Market Phase_5

Soon the forced buying could take hold, which didn’t seem possible a few weeks ago.

And I have more concrete evidence that’s encouraging.

When considering days with 600 or more Big Money outflow signals, stocks of all sizes flourish months later (iShares Core S&P Mid-Cap ETF (IJH) represents mid-cap stocks, iShares Core S&P Small-Cap ETF (IJR) represents small-cap stocks):

Forced Buying That Starts a New Market Phase_6

In short, stocks rise after meltdowns…eventually. After capitulation, market lulls can be an entry point.

Understand Today’s Data

Buying indices is good. Buying outlier stocks is great.

Capitulation precedes longer runs upwards that are fueled by forced buying. That’s what history shows and we’re seeing the same pattern now.

And this is where the MAPsignals process shines.

Source: fxempire

To stay updated on all economic events of today, please check out our Economic calendar

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Diana Wallace

Cryptocurrency

Key Takeaways:

● Bitcoin is driven by its ability to perform well in risk-on and risk-off environments, according to Bitcoin Suisse.

● Bitcoin’s Sharpe ratio of 1.72, second only to gold, underscores its maturity as an asset, offering superior risk-adjusted returns.

● A buyer-dominant market signals strong institutional and retail interest that could drive a supply squeeze and break new highs in May.

Bitcoin (BTC) price breached the $100,000 mark for the first time since January, fueling speculation of a new all-time high above $110,000 in May. According to Bitcoin Suisse, a crypto custody service provider, BTC’s bullish momentum stems from its ability to thrive in risk-on and risk-off environments since the US presidential elections.

Data from its “Industry Rollup” report highlights Bitcoin’s high Sharpe ratio of 1.72, a key financial metric that measures risk-adjusted returns by dividing an asset’s average return (minus the risk-free rate). A higher Sharpe ratio reflects superior risk-adjusted returns, and in 2025, Bitcoin’s robust score, surpassed only by gold, highlights its growing maturity as an asset.

Source: Bitcoin Suisse

Over the past two quarters, BTC excelled as a dual-purpose investment. It acts as a macro hedge in risk-off climates, benefiting from geopolitical tensions and de-dollarization concerns. In risk-on scenarios, it behaved as a high-conviction growth asset, with over 86% of its supply in profit. As illustrated in the chart, Bitcoin maintained a positive net return through various key phases since November 2024. Bitcoin Suisse head of research Dominic Weibei said,

“In this environment, Bitcoin has emerged as the Swiss army knife asset. Whether equities rally or bonds crumble, BTC trades on its supply-demand fundamentals, delivering a win-win profile that traditional assets simply can't offer.”

Cointelegraph reported that Bitcoin is gearing up for the next leg of an “acceleration phase,” according to Fidelity Digital Assets’ Q2 2025 Signals Report. Fidelity analyst Zack Wainwright explained that Bitcoin’s historical tendency to enter explosive price surges is characterized by “high volatility and high profit.”

Bitcoin spot buyers turn “dominant”

On May 7, Bitcoin spot taker cumulative volume delta (CVD) over 90 days turned buyer dominant for the first time since March 2024. The 90-day spot taker CVD, which measures the net difference between market buy and sell volumes, reflects buyer or seller activity over a prolonged period. This shift to “taker buy dominant” aggressive buying pressure, driven by institutional interest and spot Bitcoin ETF inflows, i.e., over $4.5 billion spot inflows since April 1.

Source: CryptoQuant

This structural change in demand and Bitcoin’s robust Sharpe ratio could allow BTC to capitalize on current market conditions. As corporations and institutions rush into Bitcoin, a supply squeeze may propel prices past $110,000 in May.

Source: COINTELEGRAPH

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Foreign exchange markets are seeing the temporary Dollar rebound grow in strength, with further gains likely in the coming days and weeks before the longer-term trend of depreciation resumes.

"The thaw in the tariff war and rally in stocks and tighter credit spreads that is tempting investors to reverse FX tactics and trim short dollar positions. The greenback gained this week vs all G10 and most EM currencies," says Kenneth Broux, a strategist at Société Générale.

The USD rebound leaves the Euro to Dollar exchange rate on the cusp of a third weekly decline, albeit the pullback remains relatively shallow when compared to the notable weakness that characterised the opening months of 2025.

"EUR/USD violated trendline support around 1.1265 and buyers would previously would have stepped in," says Broux.

A lack of buying interest at this level creates scope for further near-term declines.

"A downside break would be expected to find support in the mid-1.11s," says Shaun Osborne, Chief FX Strategist at Scotiabank.

Gains for the Dollar extended after the U.S. and UK reached a trade accord that confirmed to markets that the U.S. is ready to negotiate the worst excesses of the April 02 tariffs away. Euro-Dollar's Temporary Setback Deepens_1

Euro-Dollar's Temporary Setback Deepens_1

Above: The EUR/USD setback deepens.

U.S. import tariffs risk slowing U.S. economic growth, which dents the attractiveness of U.S. assets with foreign investors.

Efforts to mitigate these tariffs with a new set of trade agreements will, therefore, benefit the USD.

In this vein, Monday's trade in Euro-Dollar should reflect the outcome of trade talks between the U.S. and China in Switzerland.

"Attention turns to tomorrow’s discussions between U.S. and China on tariffs and the market open on Monday," says Broux.

U.S. Treasury Secretary Scott Bessent and Chief Trade Negotiator Jamieson Greer will meet China's economic chief, He Lifeng, in Switzerland.

"My sense is this will be about de-escalation," Bessent said in a televised interview following the announcement of talks. "We’ve got to de-escalate before we can move forward."

Despite progress, the USD's rebound has been relatively shallow and it is becoming clear that too much has changed in 2025 for investors to fully back the U.S. exceptionalist trade again., exposing the USD to further softness. Euro-Dollar's Temporary Setback Deepens_2

Euro-Dollar's Temporary Setback Deepens_2

Above: The Dollar index (DXY). "Objectively, we maintain our view that the USD will continue to weaken against the Majors. This will result in the USD Index (DXY) entering a new trading range below 100 and falling further towards 96.9 by 1Q26." - UOB.

Peter Chia, Senior FX Strategist at United Overseas Bank (UOB) in Singapore, says the most likely reason behind the USD's sell-off in April, which included a dramatic plunge against the Taiwan Dollar, was likely due to the concentrated unwinding of large amounts of USD from exporters who had previously held onto their USD trade proceeds.

"Objectively, we maintain our view that the USD will continue to weaken against the Majors," says Chia.

David S. Adams, lead FX strategist at Morgan Stanley, says his team maintains a bearish stance on the Dollar as the U.S. yield curve bull-steepens and investors continue to hedge U.S. investments.

Foreign investors in U.S. assets entered 2025 largely unhedged as they anticipated further Dollar strength under the second Trump regime that was expected to extend a period of U.S. economic and financial exceptionalism.

However, U.S. stocks and the Dollar have fallen sharply under fears that tariffs would undermine economic growth.

For unhedged foreign investors, this means losses from stock market losses were amplified by the falling Dollar.

As investors build hedges, more Dollars must be sold.

"We are bearish on the DXY as the US yield curve bull-steepens and investors continue to hedge US investments," says Adams.

Source: Poundsterlinglive

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Adam

Economic

China–U.S. Trade War

After Thursday’s exuberant rally, investors were cautiously optimistic this morning as they processed the diplomatic handshake across the Atlantic. The United States and Britain, seeking to quell the thunder of trade wars, unveiled a limited - but symbolically potent-accord. Under the terms, Britain will ease tariffs on American imports and extend a warmer welcome to U.S. goods. Washington, for its part, will keep its 10 percent baseline tariff firmly in place, a gesture of consistency if not compromise. For all its fanfare, the agreement’s narrow scope leaves analysts squinting into the fog, wondering if this is the blueprint for a new era of trade détente or merely a polite overture.

Markets took note not so much of what was signed, but of what wasn't barked. Trump's administration, it seems, is all noise and little bite - at least in this instance. The trade relationship with the UK, while not strategically vital to the US, carries symbolic weight. Trump, in typical form, hailed the deal as “decisive” and even “historic.” Perhaps most importantly, it’s the first agreement of the Trump 2.0 era - and it suggests that a return to diplomatic normalcy is at least conceivable.

Investors have turned their attention eastward after new declarations from Trump over tariffs. This weekend, the alpine neutrality of Switzerland will host high-stakes meetings between American and Chinese officials. Donald Trump wants to slash China’s towering 145% tariffs. He said on Friday that China should open up its market to United States and that 80% tariffs on Chinese goods "seems right." "China should open up its market to USA -- would be so good for them!!! Closed markets don't work anymore!!!" Trump said in a Truth Social post. "80% tariff on China seems right. Up to Scott B," Trump said, referring to Treasury Secretary Scott Bessent.

The markets offered a modest verdict. Dow E-minis gained 0.1%. The S&P 500 E-minis eked out a 0.2% gain, and the Nasdaq 100 E-minis fared better, climbing 0.3%.

On the corporate front, enthusiasm surged in pockets. The Trade Desk shares skyrocketed 14% in premarket trading, bolstered by quarterly results that danced past Wall Street’s expectations. Pinterest posted a similarly sunny picture, gaining 13.8% on a rosy forecast. But not all was jubilation: Expedia stumbled, missing revenue targets and falling 9.3%.

Western equity markets have donned their old cloak of invincibility - or so it seems. Since the grown-ups in Donald Trump’s advisory circle appeared to have outmaneuvered the more zealous voices shaping his economic agenda, investors have been breathing a cautious sigh of relief. Wall Street, for one, has recovered all the ground it lost during that fleeting skirmish over tit-for-tat tariffs. The S&P 500 is now down a mere 3.7% for the year, a sharp turnaround from its nadir of -21% on 7 April - just over a month ago.

In Europe, things look rosier still. European markets rallied once more yesterday. The Stoxx Europe 600 has now advanced in 11 of the past 13 sessions, boasting a year-to-date gain of 5.5%.

China, for its part, announced overnight that exports in April came in better than forecast, while the decline in imports was less severe than feared. Exports to the US have collapsed (no surprise there), but Beijing has deftly pivoted, redirecting outbound shipments to Southeast Asia, Africa, Europe, and Latin America. One might brace for a tidal wave of bargain-bin goods Made in China appearing on online platforms across the globe.

Elsewhere, the week closes on a busy note. Beyond the Sino-American summit in Bern, the Roman Catholic Church has a new pontiff: the American Robert Francis Prevost, who has taken the name Leo XIV. Vladimir Putin is playing host to a constellation of world leaders in Moscow to commemorate the 80th anniversary of the defeat of Nazi Germany. And US Commerce Secretary Howard Lutnick has added a pinch of pessimism, suggesting that trade talks with South Korea and Japan may take far longer to conclude than the relatively swift deal with the UK.

In the Asia-Pacific region, markets wrapped up the week with mixed results: Japan, Australia, and Taiwan posted solid gains, while China and Hong Kong dipped modestly. India saw a slightly sharper decline, and South Korea ended the week more or less flat. European indices are pointing upwards, with the Stoxx Europe 600 up 0.4%.

Source: marketscreener

To stay updated on all economic events of today, please check out our Economic calendar

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Thomas

Central Bank

Waller noted the significant contributions of John Taylor, a key figure in the realm of monetary policy rules, and highlighted a broader discussion from the early 1980s about the advantages and disadvantages of rules versus discretion in monetary policy. Waller also acknowledged the influential work of Finn Kydland and Ed Prescott, who in 1977 argued that policy promises made today may not be kept in the future if there are benefits to breaking those promises.

The Fed Governor explained how Kydland and Prescott’s model suggested that a central bank might break its promise to keep inflation low, as doing so could stimulate the economy and decrease unemployment. However, this would lead to higher expectations for future inflation, forcing the central bank to validate these expectations with higher inflation to avoid a recession. This would result in a high-inflation equilibrium with no gains from increased output or lower unemployment.

Waller further discussed the importance of a central bank’s commitment to following a rule to set policy, which would prevent it from breaking its promises. This approach, he noted, would keep inflation low while maintaining the same outcomes for output and employment, thereby demonstrating that rules could outperform discretion.

Robert Barro and David Gordon’s 1983 study on reputation building by the central bank was also mentioned by Waller. The study showed that the central bank could establish a reputation for fulfilling promises, even in a world where commitment isn’t feasible.

Waller then introduced his own research journey, which began in 1983 after reading the Barro and Gordon paper. He explored the role of individual credibility in central bank policy and the potential impact of changes in leadership on the bank’s credibility. Waller’s research led him to study central bank design and the importance of central bank independence.

In his speech, Waller also referenced Ken Rogoff’s paper on "conservative" central bankers, who are more averse to inflation than the rest of society. Waller explained that these conservative central bankers could choose a lower inflation rate, but this would result in greater instability of output and employment. To ensure the credibility of these promises to control inflation, the central bank needed to be independent and protected from threats to its independence.

Waller concluded his speech by emphasizing the importance of having an independent policy board set monetary policy. He argued that this structure, which is currently in place at the Federal Reserve, improves social well-being and enhances economic stability. Waller also expressed his hope that this structure will continue to be in place for years to come.

Source: Investing

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Adam

Economic

The stakes are high for the U.S. and China’s icebreaker trade talks this weekend as the outcome could reset the future of economic relations between the world’s two largest economies.

U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are scheduled to meet with Chinese lead economic representative and Vice Premier He Lifeng in Switzerland on Saturday.

Analysts say a comprehensive deal is unlikely to come out from a single meeting, however, they are hopeful that a partial rollback of the sky-high tariffs will be on the table.

Both sides have been looking for a pathway to de-escalation, as the economic toll of tariffs have become increasingly difficult to ignore.

The U.S. economy contracted 0.3% in the first quarter this year amid mounting concerns that the economy will slip into a recession with higher inflation and unemployment. And while the Chinese economy grew a better-than-expected 5.4% in the first three months this year, major banks have slashed their full-year growth forecasts for the country to just around 4% — below the government’s target of around 5%.

Trump still might have more to lose, as the Chinese political system grants the country’s leadership a “higher pain threshold” and a “greater degree of control over macro policy support in the short term,” said Dan Wang, China director at political risk consultancy firm Eurasia Group.

Vice Premier He’s main mission will simply be seeking clarity on what Trump wants and assessing whether the U.S. intends to hurt China’s interests, Wang said.

In what appeared to be a confidence boost ahead of the meeting, China released trade data that showed its exports surged 8.1% year on year in April on the back of a jump in shipments to Southeast Asian nations, shrugging off the 21% drop in outbound goods to the U.S.

And on Friday, China’s Commerce Ministry launched a “special operation” to combat the smuggling of strategic minerals, including gallium, germanium, antimony, tungsten and medium and heavy rare earths.

Without naming specific entities, the ministry framed the operation as “a crackdown on overseas entities that had colluded with domestic illegal personnel” to bypass the export control rules it had ratcheted up earlier this year.

“It serves as a useful reminder of the leverage China possesses as the negotiations are set to get underway in Geneva,” said Stephen Olson, a visiting senior fellow at the Institute of Southeast Asian Studies and a former U.S. trade negotiator.

China is the world’s largest producer of several critical minerals crucial to making semiconductors, defense equipment and clean energy. As part of the retaliatory measures against Trump’s tariffs announced last month, China has increased export controls of the metals.

“The sharpest arrow that China has in its quiver would be to restrict U.S. access to critical minerals that can’t readily be sourced elsewhere,” Olson said.

High on Washington’s agenda is securing the removal of China’s export restrictions on rare earths used to make magnets, Bloomberg reported Friday, citing people familiar with the matter.

Another potential pressure point for Trump is China’s vast holdings of U.S. Treasuries, which could pose risks to financial market stability, said Wu Xinbo, director of the Center for American Studies at Fudan University.

Beijing is likely to further trim its nearly $800-billion stockpile of U.S. government debt if it wants to turn up the heat on Trump, said Wu.

Despite market speculation that China might unload its Treasury holdings to hit back at tariffs, a significant sell-off could also backfire. Such a move might strengthen the yuan, undermining China’s export competitiveness, and lead to substantial losses on its dollar-denominated assets.

What to expect

A partial reversal of tariffs is one of the most likely outcomes of the meeting, according to analysts who remain split on the extent of any adjustments and the pace of de-escalation.

Robin Xing, chief China economist at Morgan Stanley, projects that effective U.S. tariff rates on Chinese goods could be lowered from the current 107% to a terminal rate of 45% by year-end.

Similarly, Tianchen Xu, senior economist at Economist Intelligence Unit, expects the U.S. and China to scale back their mutual weighted average tariff rates of around 50% in the near term.

That’s still elevated compared to the tariff rates of 10.9% on Chinese goods and 16% that China had imposed on American products before Trump returned to office, according to Xu’s estimates.

In recent days, senior U.S. officials have sounded an optimistic tone over the upcoming talks, saying they could ease the trade barriers that Trump raised last month.

“De-escalating, bringing those rates down to where they could, where they should be, I think it’s Scott Bessent’s goal,” Secretary of Commerce Howard Lutnick told CNBC Friday. “And that’s what the president hopes is a good outcome, is a de-escalating world where we go back to each other and then we work on a big deal together.”

During a White House press conference on the signing of a trade deal with Britain, Trump said of the Switzerland meeting, “I think we’re going to have a good weekend with China.”

The U.S. president then said in a post on social media platform Truth Social on Friday, that “80% Tariff on China seems right! Up to Scott B.”

Chinese officials, on the other hand, have struck a firmer tone, reiterating the country’s demand for the Trump administration to cancel all unilateral tariffs on China.

A spokesperson for the Commerce Ministry said Wednesday that “China will not sacrifice principle to reach [a] deal with U.S.,” while repeating that Washington must “rectify its wrongdoing” by removing all unilateral tariffs.

Comprehensive deal unlikely

During the upcoming talks, China could still offer some “sweeteners,” such as promises to step up its crackdown on fentanyl flows, said Xu, which could lead to a near-term removal of the 20% fentanyl-related tariffs Trump imposed.

Both sides have sought to temper the economic pain from the exorbitant tariffs, exempting the levies on a range of goods, including consumer electronics, semiconductors and auto parts.

China reportedly exempted import duties on select pharmaceuticals, microchips and aircraft engines from the United States. It has also created a “whitelist” of U.S. goods that will be exempted from extra levies, according to Reuters.

However, attempts to achieve a more comprehensive deal, similar to the Phase One deal signed during Trump’s first term, will likely be “lengthy and unproductive,” said Xu, as both sides have shown little appetite for compromise over respective strategic priorities and economic red lines.

“We severely doubt the possibility of the U.S. and China reaching something close to the Phase One trade agreement reached in 2020—a model that has been discredited in the eyes of senior US officials,” Xu added.

China had alleged it fulfilled the terms under the Phase One trade deal that Trump struck with Beijing during his first presidential term, while claiming the U.S. violated certain mandates in the agreement.

The deal required China to boost purchases of U.S. goods by $200 billion over a two-year period, but Beijing did not meet the targets as the Covid-19 pandemic hit.