ETH Rallies 20%, Marking Largest Increase Since 2021 as Pectra Upgrade Boosts ‘Confidence’

Ethereum’s ether, known as ETH, has surged to $2,215.19 during early trading hours in Asia. This increase of almost 20% marks its most significant rise since 2021, largely attributed to the positive reception of the protocol’s Pectra upgrade, with trading surpassing the $2100 mark.

This uptick in Ethereum is part of a larger cryptocurrency market rally, coinciding with Bitcoin (BTC) climbing above $100,000, achieving this milestone for the first time in three months.

The Pectra upgrade is considered the most extensive revision of the Ethereum protocol since the Merge in 2022, entailing a substantial hard fork. The upgrade streamlines validator functions by raising the staking limit from 32 to 2,048 ETH, enhances wallet functionality through account abstraction, and encompasses nine additional Ethereum Improvement Proposals.

According to Ming Jung from Presto Research, Ethereum is finally gaining momentum after lagging behind Bitcoin for most of the year. While Bitcoin approaches its all-time high, Ethereum remains nearly 50% below its peak from 2024.

Jung noted that the Pectra upgrade has reestablished some confidence, and with the ETH/BTC ratio down about 40% this year at 0.02, it is understandable that buyers are entering at these levels.

A recent report from CryptoQuant highlighted an ongoing lack of robust network activity on the Ethereum blockchain, which has remained stagnant since 2021, indicating that a return to previous highs may not be on the horizon despite the recent rally.

Flowdesk commented in a market update that they view the overall crypto market as gaining traction, with Bitcoin surpassing the $100K mark and investors shifting from caution to seeking higher-yield altcoins and structured investments.

Flowdesk observed a trend of reallocating funds from stagnant investments to more promising, high-momentum opportunities, signaling a recovery from the cautious sentiment that has dominated for the past two months.

March Zheng, General Partner of Bizantine Capital, emphasized that Ethereum has historically been a key indicator for risk-on sentiment within on-chain altcoins, and its substantial gains typically herald broader altcoin rallies.

In other cryptocurrency news, Bitcoin is trading above $102.5K amid consistent positive inflows from ETFs. Standard Chartered pointed out that their second-quarter target of $120,000 for Bitcoin may be overly cautious, with some market analysts considering the current price targets as minimal.

Meanwhile, the CoinDesk 20, an index tracking major digital assets, has risen over 10%.