The Ethereum network is flashing strong bullish signals as the first public withdrawal testnet, Zhejiang, officially went live on Wednesday, February 1. This milestone marks a critical step toward enabling ETH withdrawals — a long-awaited feature that could reshape investor sentiment and unlock new utility across the ecosystem. Just days after the launch, Ethereum’s price spiked sharply to $1,715 before correcting to around $1,644, reflecting heightened market activity and growing anticipation.
Zhejiang Testnet Goes Live: A Gateway to Withdrawals
According to Nethermind, a leading Ethereum client development team, the Zhejiang testnet has officially activated. This public test environment is designed to simulate the upcoming Shanghai-Capella upgrade, with the key feature being the ability for validators to withdraw their staked ETH for the first time since the Merge.
The testnet is expected to trigger the Shanghai-Capella upgrade at epoch 1350 — approximately six days after launch. Once activated, developers and users can begin testing partial and full ETH withdrawals, along with other Ethereum Improvement Proposals (EIPs) included in the upgrade package.
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With over 61,000 validator nodes already active and 1.952 million ETH staked on the Zhejiang testnet, participation has been robust. Barnabas Busa, DevOps engineer at the Ethereum Foundation, confirmed that tools and dashboards are now available for community members to explore withdrawal workflows and validate system performance.
This successful rollout increases confidence that the mainnet Shanghai upgrade will proceed as scheduled — potentially in March 2025.
What’s Next After Shanghai? EIP-4844 Takes Center Stage
While Shanghai focuses on unlocking staked ETH, the next major innovation on Ethereum’s roadmap is EIP-4844, also known as Proto-Danksharding. Expected to launch in May or June 2025, this upgrade aims to dramatically improve scalability for Layer 2 (L2) networks like Optimism, Arbitrum, and zkSync.
Liam Horne, founder of Optimism, highlighted six key benefits of EIP-4844:
- Accelerates the path toward a Rollup-centric future
- Drastically reduces transaction fees
- Maintains backward compatibility
- Allows continued operation as a beacon chain node
- Optimizes disk usage for validators
- Introduces short-term blob-carrying transactions to reduce data load
By introducing temporary data storage called "blobs," EIP-4844 offloads transaction data from the main chain, enabling L2 solutions to batch process more transactions at lower cost. Early estimates suggest this could boost Layer 2 throughput by up to 100x while slashing user fees by 90% or more.
This makes EIP-4844 one of the most anticipated upgrades since the Merge — not just for developers, but for everyday users tired of high gas costs.
Market Momentum Builds Amid Macro Tailwinds
The timing of these technical advances coincides with favorable macroeconomic conditions. After the U.S. Federal Reserve raised interest rates by just 25 basis points — in line with market expectations — risk assets rallied across the board.
U.S. equities continued their upward trend, with the tech-heavy Nasdaq jumping 3.25% on February 2. Cryptocurrency-linked stocks saw even stronger gains:
- Coinbase (COIN) surged 23.99%
- MicroStrategy (MSTR) rose 9.04%
- Marathon Digital (MARA) climbed 6.38%
These movements underscore the growing correlation between traditional tech markets and digital assets — especially during periods of monetary policy easing.
In the crypto market itself:
- Bitcoin reached $24,144 — its highest level since August 2022 — before pulling back slightly.
- Ethereum spiked to $1,714, marking its highest price in nearly six months.
Despite short-term volatility, both assets have shown resilience, suggesting stronger underlying demand.
Is the Crypto Winter Over? Experts Say Yes
Joe Ziolkowski, CEO and co-founder of crypto-focused insurer Relm Insurance, believes the prolonged bear market may have finally bottomed out.
“The recent momentum in digital assets suggests we’re entering a recovery phase,” Ziolkowski said. “Both retail and institutional investors are allocating more capital into crypto.”
He added that confidence is returning as the fallout from high-profile collapses — including FTX, Terra, and Three Arrows Capital — appears increasingly behind us. As trust rebuilds, sustained price appreciation becomes more likely.
👉 See how institutional interest is reshaping Ethereum’s future.
Bitcoin’s January Rally Hints at a Strong Year Ahead
Historical patterns support this optimistic outlook. According to analysis from Matrixport, Bitcoin’s 38% gain in January 2025 is a powerful bullish signal. Since 2010, there have been six years when Bitcoin posted positive returns in January. In five of those cases, the asset delivered strong gains from February through December — averaging an impressive 245% return over the remainder of the year.
Matrixport analysts also remain bullish on Bitcoin’s long-term trajectory:
“The primary driver of the 2025 bull cycle will likely be the upcoming Bitcoin halving in March 2026. Historically, halvings lead to significant price appreciation due to reduced supply inflation.”
They estimate that Bitcoin has a statistically high probability of doubling from current levels by year-end — potentially reaching $45,000 by Christmas 2025.
Frequently Asked Questions (FAQ)
🔹 When will Ethereum withdrawals go live on mainnet?
Based on current progress with the Zhejiang testnet, developers are targeting a mainnet activation of the Shanghai-Capella upgrade in March 2025, assuming no critical bugs emerge during testing.
🔹 Can I withdraw staked ETH now?
Not yet. Full withdrawal functionality is only available on testnets like Zhejiang. Mainnet withdrawals will be enabled after the Shanghai upgrade goes live.
🔹 How does EIP-4844 reduce gas fees?
EIP-4844 introduces “blob-carrying” transactions that store large amounts of data off-chain temporarily. This reduces congestion on Layer 1, allowing Layer 2 rollups to process more transactions at lower cost — potentially cutting user fees by over 90%.
🔹 What impact will Shanghai have on ETH price?
While no upgrade guarantees price movement, enabling withdrawals removes a major uncertainty. It may attract new stakers and increase market liquidity, potentially supporting upward price momentum.
🔹 Why is Zhejiang important for Ethereum?
Zhejiang is the first public testnet to simulate full ETH withdrawals. It allows developers and users to stress-test systems before deploying changes to mainnet — ensuring security and reliability.
🔹 Will staking rewards change after Shanghai?
No — staking rewards will continue as before. The main difference is that validators will finally be able to withdraw both rewards and principal staked ETH.
Final Outlook: A New Chapter for Ethereum
With the successful launch of the Zhejiang testnet, Ethereum has entered a pivotal phase. The upcoming Shanghai upgrade promises to unlock over 19 million staked ETH, restoring full capital mobility and enhancing network flexibility.
Beyond that, EIP-4844 lays the foundation for mass adoption by making Layer 2 scaling affordable and efficient. Combined with improving macro conditions and strong historical trends in Bitcoin’s price behavior, the stage is set for a broad-based recovery across digital assets.
Whether you're a developer building on Layer 2s, a staker awaiting withdrawal access, or an investor positioning for the next cycle, 2025 could mark the beginning of Ethereum’s most transformative year yet.
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Keywords: Ethereum, ETH withdrawal, Shanghai upgrade, Zhejiang testnet, EIP-4844, Layer 2 scaling, crypto market recovery