Ethereum has returned to the spotlight after trading at levels that have not been touched since March after jumping 42% over $2,500 in the past week.
This was one of the most notable breakouts in over a year and has renewed investor trust.
Sentora (formerly Intotheblock) on-chain data shows that the gathering has boosted more than 60% of its Ethereum addresses into profits. This is almost twice the 32% recorded a month ago, highlighting the strength of the market’s transformation.
Furthermore, the rally has led ETH over Bitcoin in terms of recent performance. Bitcoin rose just 10% to over $105,000 over the same period, but Ethereum’s sharp rise has surprised many people in the market.
The rally sparked speculation that Ethereum could enter a new bullish phase just months after its performance. Sean Dawson, head of research at dervive.xyz, said Encryption:
“ETH has a 20% chance of over $4,000 by Christmas (up from 9% last week) and a 12% chance of reaching $5,000. The chance of ETH falling below $1,500 by Christmas has a 15% chance of falling below $1,500 by Christmas has a 15% chance of falling below $1,500 by Christmas.”
What drives Ethereum outperformance?
Market analysts point out that several key factors appear to be driving the recent surge in Ethereum, including recent technical improvements, increased institutional support and ease of global tensions.
Last week, Ethereum completed the highly anticipated Pectra upgrade and unlocked the new feature set for the blockchain network.
This update introduces improvements across the network’s wallet capabilities, streamlines validator performance and enhances Layer 2 expansion. These upgrades are expected to make Ethereum more efficient and easier to use.
Another factor driving the ETH rally is the fact that several traditional financial institutions, including BlackRock, are deepening their use of Ethereum infrastructure through actual asset tokenization.
According to data from RWA.xyz, the sector has grown by more than 10% over the past 30 days, reaching a total of $22.1 billion. Ethereum is leading the market by managing 58% of market share, with $7.9 billion locked in tokenized assets.
Meanwhile, macroeconomic development has also heightened emotions in the broader markets.
The new trade agreement between the US and the UK helped ease investors’ fears, along with a temporary suspension of US-China tariff escalation.
These geopolitical developments support a broader risk-on mood in global markets, giving Ethereum room for further rise.