Ethereum's Ether ETH$ Leads the Market in Early Asia Hours as Traders React Favorably to the Protocol's Recent Pectra Upgrade

Ethereum's ether (ETH) price surged nearly 20% in early Asia hours as traders reacted to the protocol's recent Pectra upgrade, leading to the biggest gain since 2021, and sending the token above $2,100, according to market data from CoinDesk.

The move comes amid a broader crypto market rally that coincided with bitcoin (BTC) soaring past $100,000 for the first time in three months.

Pectra, Ethereum's most substantial overhaul since last year's Merge, is a protocol hard fork, and will consolidate validator operations by raising the staking limit from 32 to 2,048 ETH (via EIP-7251). It will also advance wallet usability through account abstraction mechanisms allowing temporary smart contract functionality (via EIP-7702), and introduces nine other Ethereum Improvement Proposals.

"ETH is finally catching up after lagging behind BTC for most of the year. While BTC is nearing its all-time high, ETH is still down nearly 50% from its 2024 peak," Ming Jung from Presto Research said.

The Pectra upgrade, Jung added, "helped restore some confidence, and with ETHBTC down nearly 40% YTD at 0.02, it's not surprising to see buyers stepping in at these levels."

In a recent research report, CryptoQuant noted that weak network activity on the Ethereum blockchain, which hasn't grown since 2021, suggests that a recovery to prior highs isn't imminent despite the rally.

In a market update, Flowdesk wrote that they see the crypto market broadly regaining momentum, with bitcoin (BTC) now above $100K and a return to risk appetite, as investors are shifting from caution to chasing higher-yield altcoins and structured products.

"We're seeing a recycling of sell flow into higher-momentum plays, a shift from the caution that’s defined the last two months. While still below Q4 2024 levels, beta appetite is clearly building," Flowdesk stated.

March Zheng, General Partner of Bizantine Capital, told CoinDesk that traders should keep in mind that usually, Ethereum has been the main on-chain altcoin indicator for risk-on, and its sizable upticks generally lead to broader altcoin rallies.

Elsewhere in crypto, bitcoin (BTC) is trading above $102.5K as ETF inflow continues to be positive. In a recent note, Standard Chartered said that its second quarter target of $120,000 might be "too conservative." Other market observers consider current upside targets to be "too low."

Meanwhile, the CoinDesk 20, a measure of the performance of the largest digital assets is up over 10%.