Ethereum has seen its biggest rise since May 2021: Will the rally continue?

Ethereum has seen its biggest rise since May 2021: Will the rally continue?

Ethereum (ETH) has seen its biggest daily increase since May 2021 following the activation of the long-awaited Pectra update. On Thursday evening CEST, ETH surged 20% and crossed the $2,200 mark, confirming its positive trend and boosting investor interest.

What's behind this unprecedented rise? A combination of technical improvements, macroeconomic factors and renewed optimism in the cryptocurrency market. Analysts point out that after a long period of lagging behind Bitcoin, Ethereum is starting to make up for lost ground. Min Jung, an analyst at Presto Research, says: "ETH has lagged behind BTC for most of the year, but is now on its way to catching up. The Pectra update has helped restore investor confidence, and given the significant drop in ETH/BTC since the beginning of the year, growth is quite expected."

A new era of Ethereum: Pectra update as a key milestone

The Pectra update, which was activated on Tuesday, represents the most significant technical step since 2022, when the merger (Merge) took place and the network switched to Proof-of-Stake. This upgrade offers significant improvements in betting efficiency, validator management and scalability at the second layer of the network. Analysts believe that these upgrades can reduce network congestion and increase network availability, which is key when compared to faster chains in the DeFi and NFT sectors.

"In addition to the positive macroeconomic outlook, traders believe the crypto industry is gaining momentum as a hedge against market uncertainties," says Nick Ruck, director at LVRG Research. "Investors are changing their view on cryptocurrencies as altcoins find buying pressure due to a renewed appetite for risk and breaking out of a downtrend."

Recent international negotiations between the US and China are also a reason for optimism. The talks, including Treasury Secretary Scott Bessent's meeting with Chinese officials in Switzerland, have increased risk appetite in global markets, which has positively impacted not only stocks but cryptocurrencies as well.

The outlook for the future: will ETH continue to rise?

Ethereum's resurgence could be a key turning point after months of stagnation and lagging behind Bitcoin. With technical strength thanks to Pectr and changing macroeconomic conditions, traders are watching anxiously to see if this is the start of a broader growth trend for altcoins.

If the positive market sentiment holds, Ethereum could not only continue its rally but also strengthen its position as a leader among smart contract platforms. Time will tell whether this is a temporary boost or the start of a new long-term growth trend.

Stay tuned with us, as the market situation is changing rapidly and each new move could mark a major turning point in the cryptocurrency scene.

*This is not an investment recommendation.

Coingarage team