Tomorrow, Ethereum will undergo the much-anticipated Pectra upgrade, and data from the blockchain suggests that validators are getting ready to handle any market fluctuations.

Even though the price of ETH has not been performing well in the past week, the decrease in validator exits shows that participants in the network are feeling confident.

Glassnode reported that there has been a noticeable decline in voluntary exits by Ethereum validators since May 1. On May 5, only 238 validators exited the network, the lowest number since April 5. This trend indicates that more validators are choosing to stay rather than cash out their staked ETH, showing trust in the network and its cryptocurrency in the long term.

The positive sentiment among Ethereum validators regarding the network's future and the Pectra upgrade is seen as a potential foundation for a post-upgrade rally in ETH.

Furthermore, the consistently positive funding rate for ETH reflects the optimistic outlook for the coin. With a funding rate of 0.0027% at present, traders are willing to pay extra to maintain long positions, indicating a prevailing bullish sentiment in the futures market.

Despite the challenges in breaking above $2,000, futures traders continue to be positive, making leveraged bets in expectation of a price increase.

As the countdown to the Pectra upgrade progresses, the decrease in validator exits may lead to a tighter supply of ETH, potentially resulting in a bullish breakout after the upgrade. A sustained bullish sentiment could drive ETH's price to $2,027.

However, there is still a possibility of a "sell-the-news" event. If the upgrade fails to meet market expectations or triggers profit-taking, ETH may face downward pressure, potentially dropping to $1,744 despite the positive signs from validator activity.