The Ethereum Shanghai upgrade, completed in April 2023, enhanced Layer 2 adoption by improving scalability and reducing gas fees via staking withdrawals and EIPs like 4895. Post-upgrade, Layer 2 solutions like Arbitrum and Optimism saw increased usage, lowering average gas fees from 25 Gwei to more affordable levels, boosting network efficiency. Network activity, however, showed mixed trends—initial staking inflows hit 572K ETH, but recent data indicates declining transaction volume, with on-chain activity dropping 46% in February 2025. Over the next three months, ETH price could face downward pressure if low demand persists, potentially testing $1,950 or dipping to $1,300. Conversely, sustained Layer 2 growth and staking reinvestments might stabilize or push ETH toward $2,300, contingent on renewed network buzz and institutional adoption.