diff --git a/packages/beacon-node/test/spec/presets/index.test.ts b/packages/beacon-node/test/spec/presets/index.test.ts
index d6486afa43f8..e8248dc18070 100644
--- a/packages/beacon-node/test/spec/presets/index.test.ts
+++ b/packages/beacon-node/test/spec/presets/index.test.ts
@@ -19,7 +19,7 @@ import {transition} from "./transition.js";
 // Just disable all capella tests as well and renable when new vectors are released
 // because the latest withdrawals we implemented are a breaking change
 const skipOpts: SkipOpts = {
-  skippedForks: ["capella"],
+  skippedForks: ["eip4844"],
   skippedRunners: ["light_client", "sync"],
   skippedHandlers: ["full_withdrawals", "partial_withdrawals", "bls_to_execution_change", "withdrawals"],
 };
diff --git a/packages/beacon-node/test/spec/presets/sanity.ts b/packages/beacon-node/test/spec/presets/sanity.ts
index 5780256dfa61..2bcdcb6f54eb 100644
--- a/packages/beacon-node/test/spec/presets/sanity.ts
+++ b/packages/beacon-node/test/spec/presets/sanity.ts
@@ -71,7 +71,7 @@ export const sanityBlocks: TestRunnerFn<SanityBlocksTestCase, BeaconStateAllFork
           verifyProposer: verify,
           verifySignatures: verify,
           assertCorrectProgressiveBalances,
-          disabledWithdrawals: true,
+          disabledWithdrawals: fork === ForkName.eip4844,
         });
       }
       return wrappedState;
diff --git a/packages/beacon-node/test/spec/specTestVersioning.ts b/packages/beacon-node/test/spec/specTestVersioning.ts
index e81754fd32ec..2c92d3f25c88 100644
--- a/packages/beacon-node/test/spec/specTestVersioning.ts
+++ b/packages/beacon-node/test/spec/specTestVersioning.ts
@@ -15,7 +15,7 @@ import {IDownloadTestsOptions} from "@lodestar/spec-test-util";
 const __dirname = path.dirname(fileURLToPath(import.meta.url));
 
 export const ethereumConsensusSpecsTests: IDownloadTestsOptions = {
-  specVersion: "v1.3.0-alpha.1-hotfix.2",
+  specVersion: "v1.3.0-alpha.2",
   // Target directory is the host package root: 'packages/*/spec-tests'
   outputDir: path.join(__dirname, "../../spec-tests"),
   specTestsRepoUrl: "https://github.com/ethereum/consensus-spec-tests",
diff --git a/packages/params/src/index.ts b/packages/params/src/index.ts
index d6452c49990a..240dcf566893 100644
--- a/packages/params/src/index.ts
+++ b/packages/params/src/index.ts
@@ -86,6 +86,7 @@ export const {
 
   MAX_BLS_TO_EXECUTION_CHANGES,
   MAX_WITHDRAWALS_PER_PAYLOAD,
+  MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP,
 
   FIELD_ELEMENTS_PER_BLOB,
   MAX_BLOBS_PER_BLOCK,
diff --git a/packages/params/src/interface.ts b/packages/params/src/interface.ts
index 4975c8d151eb..2d4f60f0e6e4 100644
--- a/packages/params/src/interface.ts
+++ b/packages/params/src/interface.ts
@@ -73,6 +73,7 @@ export interface BeaconPreset {
   //////////
   MAX_BLS_TO_EXECUTION_CHANGES: number;
   MAX_WITHDRAWALS_PER_PAYLOAD: number;
+  MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP: number;
 
   // EIP-4844
   ///////////
diff --git a/packages/params/src/presets/mainnet.ts b/packages/params/src/presets/mainnet.ts
index 7fb5392ff5b7..3fc4cdd3690b 100644
--- a/packages/params/src/presets/mainnet.ts
+++ b/packages/params/src/presets/mainnet.ts
@@ -112,10 +112,11 @@ export const mainnetPreset: BeaconPreset = {
   //////////
   MAX_BLS_TO_EXECUTION_CHANGES: 16,
   MAX_WITHDRAWALS_PER_PAYLOAD: 16,
+  MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP: 16384,
 
   // EIP-4844
   ///////////
   // https://github.com/ethereum/consensus-specs/blob/dev/presets/mainnet/eip4844.yaml
   FIELD_ELEMENTS_PER_BLOB: 4096,
-  MAX_BLOBS_PER_BLOCK: 16,
+  MAX_BLOBS_PER_BLOCK: 4,
 };
diff --git a/packages/params/src/presets/minimal.ts b/packages/params/src/presets/minimal.ts
index 5c2def87b3f4..b9de2107bc88 100644
--- a/packages/params/src/presets/minimal.ts
+++ b/packages/params/src/presets/minimal.ts
@@ -119,10 +119,11 @@ export const minimalPreset: BeaconPreset = {
   //////////
   MAX_BLS_TO_EXECUTION_CHANGES: 16,
   MAX_WITHDRAWALS_PER_PAYLOAD: 4,
+  MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP: 16,
 
   // EIP-4844
   ///////////
   // https://github.com/ethereum/consensus-specs/blob/dev/presets/minimal/eip4844.yaml
   FIELD_ELEMENTS_PER_BLOB: 4,
-  MAX_BLOBS_PER_BLOCK: 16,
+  MAX_BLOBS_PER_BLOCK: 4,
 };
diff --git a/packages/params/test/e2e/ensure-config-is-synced.test.ts b/packages/params/test/e2e/ensure-config-is-synced.test.ts
index 0916543e428a..e27dd13c7d2b 100644
--- a/packages/params/test/e2e/ensure-config-is-synced.test.ts
+++ b/packages/params/test/e2e/ensure-config-is-synced.test.ts
@@ -8,7 +8,7 @@ import {loadConfigYaml} from "../yaml.js";
 // Not e2e, but slow. Run with e2e tests
 
 /** https://github.com/ethereum/consensus-specs/releases */
-const specConfigCommit = "v1.3.0-alpha.1";
+const specConfigCommit = "v1.3.0-alpha.2";
 
 describe("Ensure config is synced", function () {
   this.timeout(60 * 1000);
diff --git a/packages/state-transition/src/block/processWithdrawals.ts b/packages/state-transition/src/block/processWithdrawals.ts
index defe9cf00d00..04c93fc32736 100644
--- a/packages/state-transition/src/block/processWithdrawals.ts
+++ b/packages/state-transition/src/block/processWithdrawals.ts
@@ -1,5 +1,9 @@
 import {ssz, capella} from "@lodestar/types";
-import {MAX_EFFECTIVE_BALANCE, MAX_WITHDRAWALS_PER_PAYLOAD} from "@lodestar/params";
+import {
+  MAX_EFFECTIVE_BALANCE,
+  MAX_WITHDRAWALS_PER_PAYLOAD,
+  MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP,
+} from "@lodestar/params";
 
 import {CachedBeaconStateCapella} from "../types.js";
 import {decreaseBalance, hasEth1WithdrawalCredential} from "../util/index.js";
@@ -21,10 +25,23 @@ export function processWithdrawals(
     }
     decreaseBalance(state, withdrawal.validatorIndex, Number(withdrawal.amount));
   }
+
+  // Update the nextWithdrawalIndex
   if (expectedWithdrawals.length > 0) {
     const latestWithdrawal = expectedWithdrawals[expectedWithdrawals.length - 1];
     state.nextWithdrawalIndex = latestWithdrawal.index + 1;
+  }
+
+  // Update the nextWithdrawalValidatorIndex
+  if (expectedWithdrawals.length === MAX_WITHDRAWALS_PER_PAYLOAD) {
+    // All slots filled, nextWithdrawalValidatorIndex should be validatorIndex having next turn
+    const latestWithdrawal = expectedWithdrawals[expectedWithdrawals.length - 1];
     state.nextWithdrawalValidatorIndex = (latestWithdrawal.validatorIndex + 1) % state.validators.length;
+  } else {
+    // expected withdrawals came up short in the bound, so we move nextWithdrawalValidatorIndex to
+    // the next post the bound
+    state.nextWithdrawalValidatorIndex =
+      (state.nextWithdrawalValidatorIndex + MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP) % state.validators.length;
   }
 }
 
@@ -34,14 +51,14 @@ export function getExpectedWithdrawals(
   const epoch = state.epochCtx.epoch;
   let withdrawalIndex = state.nextWithdrawalIndex;
   const {validators, balances, nextWithdrawalValidatorIndex} = state;
-  const validatorCount = validators.length;
+  const bound = Math.min(validators.length, MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP);
 
   let n = 0;
 
   const withdrawals: capella.Withdrawal[] = [];
   // Just run a bounded loop max iterating over all withdrawals
   // however breaks out once we have MAX_WITHDRAWALS_PER_PAYLOAD
-  for (n = 0; n < validatorCount; n++) {
+  for (n = 0; n < bound; n++) {
     // Get next validator in turn
     const validatorIndex = (nextWithdrawalValidatorIndex + n) % validators.length;
 
diff --git a/packages/state-transition/src/util/genesis.ts b/packages/state-transition/src/util/genesis.ts
index bb818f851d0a..1070ef6effee 100644
--- a/packages/state-transition/src/util/genesis.ts
+++ b/packages/state-transition/src/util/genesis.ts
@@ -279,7 +279,7 @@ export function initializeBeaconStateFromEth1(
       ssz.capella.ExecutionPayloadHeader.defaultViewDU();
   }
 
-  if (GENESIS_SLOT >= config.CAPELLA_FORK_EPOCH) {
+  if (GENESIS_SLOT >= config.EIP4844_FORK_EPOCH) {
     const stateEip4844 = state as CompositeViewDU<typeof ssz.eip4844.BeaconState>;
     stateEip4844.fork.previousVersion = config.EIP4844_FORK_VERSION;
     stateEip4844.fork.currentVersion = config.EIP4844_FORK_VERSION;
diff --git a/packages/state-transition/test/perf/block/processWithdrawals.test.ts b/packages/state-transition/test/perf/block/processWithdrawals.test.ts
index 6289e62fe282..58f1feb7b113 100644
--- a/packages/state-transition/test/perf/block/processWithdrawals.test.ts
+++ b/packages/state-transition/test/perf/block/processWithdrawals.test.ts
@@ -32,12 +32,13 @@ describe("getExpectedWithdrawals", () => {
     // Intermediate bad case
     {excessBalance: 0.1, eth1Credentials: 0.1, withdrawable: 0, withdrawn: 0, cache: true, sampled: 1_020},
     {excessBalance: 0.03, eth1Credentials: 0.03, withdrawable: 0, withdrawn: 0, cache: true, sampled: 11_777},
-    {excessBalance: 0.01, eth1Credentials: 0.01, withdrawable: 0, withdrawn: 0, cache: true, sampled: 141_069},
-    // Worst case: All validators need to be probed
-    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, cache: true, sampled: 250_000},
-    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, cache: false, sampled: 250_000},
-    {excessBalance: 0, eth1Credentials: 1, withdrawable: 0, withdrawn: 0, cache: true, sampled: 250_000},
-    {excessBalance: 0, eth1Credentials: 1, withdrawable: 0, withdrawn: 0, cache: false, sampled: 250_000},
+    // Expected 141_069 but gets bounded at 16_384
+    {excessBalance: 0.01, eth1Credentials: 0.01, withdrawable: 0, withdrawn: 0, cache: true, sampled: 16_384},
+    // Worst case: All validators 250_000 need to be probed but get bounded at 16_384
+    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, cache: true, sampled: 16_384},
+    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, cache: false, sampled: 16_384},
+    {excessBalance: 0, eth1Credentials: 1, withdrawable: 0, withdrawn: 0, cache: true, sampled: 16_384},
+    {excessBalance: 0, eth1Credentials: 1, withdrawable: 0, withdrawn: 0, cache: false, sampled: 16_384},
   ];
 
   for (const opts of testCases) {
diff --git a/packages/state-transition/test/unit/block/processWithdrawals.test.ts b/packages/state-transition/test/unit/block/processWithdrawals.test.ts
index 6072a0ba5ae2..e5de11c3063d 100644
--- a/packages/state-transition/test/unit/block/processWithdrawals.test.ts
+++ b/packages/state-transition/test/unit/block/processWithdrawals.test.ts
@@ -17,9 +17,10 @@ describe("getExpectedWithdrawals", () => {
     {excessBalance: 0.95, eth1Credentials: 0.7, withdrawable: 0.05, withdrawn: 0, withdrawals: 16, sampled: 18},
     // Intermediate bad case
     {excessBalance: 0.1, eth1Credentials: 0.1, withdrawable: 0, withdrawn: 0, withdrawals: 16, sampled: 1020},
-    {excessBalance: 0.01, eth1Credentials: 0.01, withdrawable: 0, withdrawn: 0, withdrawals: 16, sampled: 141069},
-    // Worst case: All validators need to be probed
-    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, withdrawals: 0, sampled: vc},
+    // Expected 141069 but gets bounded by 16384
+    {excessBalance: 0.01, eth1Credentials: 0.01, withdrawable: 0, withdrawn: 0, withdrawals: 2, sampled: 16384},
+    // Expected 250000 but gets bounded by 16384
+    {excessBalance: 0, eth1Credentials: 0.0, withdrawable: 0, withdrawn: 0, withdrawals: 0, sampled: 16384},
   ];
 
   for (const opts of testCases) {
diff --git a/packages/validator/src/util/params.ts b/packages/validator/src/util/params.ts
index fdc6ba18f6a0..44a0cbf20276 100644
--- a/packages/validator/src/util/params.ts
+++ b/packages/validator/src/util/params.ts
@@ -209,6 +209,7 @@ function getSpecCriticalParams(localConfig: IChainConfig): Record<keyof ConfigWi
     /////////////////
     MAX_BLS_TO_EXECUTION_CHANGES: capellaForkRelevant,
     MAX_WITHDRAWALS_PER_PAYLOAD: capellaForkRelevant,
+    MAX_VALIDATORS_PER_WITHDRAWALS_SWEEP: capellaForkRelevant,
 
     // # EIP4844Preset
     /////////////////