Ethereum (ETH) rallies 20% following the Pectra upgrade, outpacing Bitcoin (BTC) as both cryptocurrencies surge amid a broader market rebound.

Ether, Ethereum’s native token, rose nearly 20% during early trading in Asia, surpassing $2,100 and marking the largest daily gain since 2021. This surge was driven by the successful implementation of Ethereum’s Pectra upgrade, which has injected renewed optimism into the market. Alongside Ethereum’s gains, Bitcoin also broke the $100,000 mark for the first time in three months, contributing to the positive momentum in the broader crypto space.

The Pectra upgrade, Ethereum’s most significant overhaul since the Merge in 2022, includes a major protocol hard fork and introduces key changes such as raising the staking limit from 32 to 2,048 ETH (via EIP-7251) and improving wallet functionality through account abstraction mechanisms (via EIP-7702). In addition, nine other Ethereum Improvement Proposals (EIPs) have been integrated, further enhancing the network’s capabilities.

“ETH is catching up after a lag behind BTC for much of this year,” said Ming Jung from Presto Research. “Although BTC is nearing its all-time high, ETH is still almost 50% below its 2024 peak.” He attributed the positive price movement to the confidence restored by the Pectra upgrade and noted that the ETH/BTC ratio’s 40% drop year-to-date had drawn in buyers at current levels.

While analysts like CryptoQuant remain cautious due to weak network activity on Ethereum’s blockchain, which has shown little growth since 2021, there is still optimism in the market. CryptoQuant believes the current rally may not signal an immediate return to past highs for Ethereum, despite the impressive price increase.

Market sentiment overall is shifting. Flowdesk noted in a recent update that the crypto market is regaining momentum, with Bitcoin’s rise above $100,000 sparking a return of risk appetite among investors. “We are seeing a shift from cautious sentiment to higher-risk, higher-return investments, especially in altcoins,” Flowdesk stated.

March Zheng, General Partner at Bizantine Capital, pointed out that Ethereum often acts as a bellwether for the broader altcoin market. “Ethereum’s strong performance typically leads to broader altcoin rallies, and this uptick is likely to spark further gains across the space.”

Bitcoin is holding firm above $102,500, supported by sustained ETF inflows and growing institutional interest. Standard Chartered recently revised its second-quarter Bitcoin price target to $120,000, suggesting that previous expectations were too conservative. Other market experts are reassessing their targets as Bitcoin and Ethereum continue to outperform.

The CoinDesk 20, which tracks the top digital assets, is up over 10%, reflecting the ongoing optimism and growth in the crypto market.