Ethereum Climbs 20%, Its Biggest Rally Since 2021, Boosted by Pectra Upgrade’s Positive Impact.

Ethereum (ETH) saw a significant 20% rally after the Pectra upgrade, outpacing Bitcoin (BTC) as both assets benefit from a broader crypto market surge.

Ethereum’s ether surged past $2,100 during early trading hours in Asia, marking the largest one-day gain since 2021. The strong price action was fueled by the completion of Ethereum’s Pectra upgrade, which is seen as a critical step forward for the protocol. As Ethereum’s price surged, Bitcoin also joined the rally, breaking through the $100,000 level for the first time in three months.

The Pectra upgrade, which is Ethereum’s most substantial overhaul since the 2022 Merge, introduced several improvements. It includes a major protocol hard fork designed to consolidate validator operations, raise the staking limit from 32 to 2,048 ETH (via EIP-7251), and enhance wallet usability with account abstraction mechanisms (via EIP-7702). Additionally, nine other Ethereum Improvement Proposals (EIPs) were implemented, which are expected to improve the network’s scalability and efficiency.

“ETH is now catching up after trailing BTC for much of the year,” said Ming Jung from Presto Research. “While BTC is approaching its all-time high, ETH is still down nearly 50% from its peak in 2024.” Jung credited the Pectra upgrade with restoring investor confidence and helping ETH gain momentum. With the ETH/BTC ratio down around 40% year-to-date, it is unsurprising that buyers are returning to Ethereum at these levels.

Despite the bullish sentiment, analysts at CryptoQuant remain cautious, citing weak network activity on the Ethereum blockchain, which has not seen growth since 2021. They suggest that although the current rally is promising, Ethereum may struggle to return to previous highs in the near term.

Broader market sentiment also seems to be improving. According to Flowdesk, the crypto market is recovering, with Bitcoin surpassing $100,000 and a renewed appetite for risk among investors. “We are seeing a shift in investor behavior, moving from caution to seeking higher-risk, higher-reward assets like altcoins,” Flowdesk noted in a market update.

March Zheng, General Partner at Bizantine Capital, highlighted that Ethereum’s price movements typically act as a leading indicator for altcoins. As Ethereum gains, broader altcoin rallies often follow.

Meanwhile, Bitcoin continues to hold steady above $102,500, with positive ETF inflows and institutional interest keeping the momentum strong. Standard Chartered recently revised its Q2 target for Bitcoin to $120,000, suggesting that previous price expectations may have been too conservative. Other analysts are also reassessing their upside targets for both Bitcoin and Ethereum.

The CoinDesk 20, which tracks the performance of the largest digital assets, has risen more than 10%, reflecting the overall optimism sweeping the crypto market.