Ethereum Surges 50% This Week: Pectra Upgrade and Positive Inflation Data
Ethereum (ETH) is gaining traction as it surged more than 50% this week, marking one of its most impressive rallies since the start of the year. On Tuesday, ETH crossed $2,700 in afternoon trading (ETH) before pulling back slightly, but still managed to gain nearly 8% over the past 24 hours, according to data from CoinGecko.
The biggest driver of the rally was the Pectra network upgrade, an update that is expected to improve the performance and speed of the Ethereum network. In addition, positive signals from US inflation data have boosted investors' confidence in risk assets like cryptocurrencies.
ETH Back in Focus
“We are seeing strong momentum in ETH,” said Carlos Guzman, research analyst at GSR. “Ethereum is finally getting some attention after a long period of lagging behind other assets. The change in market sentiment is bringing investors back to ETH.”
Ethereum is currently trading around $2,613, up more than 42% over the past seven days. The break above technical resistance levels is attracting more buying from both spot and derivatives markets.
Impact of Inflation and Monetary Policy
The latest US inflation report showed that the consumer price index (CPI) rose 0.2% in April, falling short of expectations, and annual inflation held at 2.3% — close to the Federal Reserve’s 2% target. This opens up expectations that the Fed may ease monetary policy in the near future, a factor that is expected to positively support the cryptocurrency market.
In addition, the US and China reaching an initial agreement to ease trade tensions also creates a more favorable environment for risky assets, including cryptocurrencies.
Other Coins Follow
Not only ETH, other altcoins also show impressive gains. Solana (SOL) is up more than 5%, while meme coins such as Dogecoin (DOGE) and Shiba Inu (SHIB) are both up nearly 4% in the past 24 hours. Bitcoin (BTC), the world's largest digital currency, is currently trading around $104,200, up slightly by 1.4% on the week.
Stock Markets Also Rise
The positive impact of inflation data is not limited to the cryptocurrency market. Two of the three major US stock market indices closed in the green, with the Nasdaq up 1.6% and the S&P 500 up 0.7%.
What’s Behind?
The $2,800 price zone is seen as the next key resistance level for ETH, according to Amberdata’s Greg Magadini, based on Deribit options market data. However, he stressed that the market is not yet “positioned” for a strong rally, which could leave room for ETH to continue to break above $2,800.
“There’s no reason why ETH can’t continue to move higher,” Magadini concluded.
Bottom line: Ethereum is making a strong comeback thanks to a combination of technicals (Pectra upgrade), positive macroeconomic data, and improving investor sentiment. If this momentum continues, ETH could soon retest the $3,000 level in the coming period.