Ethereum Surges 20% to $2,400 on Institutional Demand and Pectra Upgrade

Coin WorldSaturday, May 10, 2025 4:07 am ET
1min read

Ethereum, the world's second-largest cryptocurrency, has surged past the $2,400 mark, marking a significant milestone in its price trajectory. The surge, which occurred on May 9, 2025, represents a substantial increase from its previous levels, with the cryptocurrency posting its strongest daily performance since the 2021 bull market. This rally comes after months of subdued price action under $2,000, signaling a potential shift in broader market sentiment.

The price surge was driven by a combination of factors, including renewed institutional demand and macro tailwinds. The rollout of Ethereum's Pectra upgrade also played a significant role in the price increase, as it introduced new features and improvements to the network. The upgrade, which was highly anticipated by the crypto community, helped to boost investor confidence and drive up the price of Ethereum.

The rally also triggered the liquidation of over $430 million in short positions, as short sellers were caught off guard by the sudden price increase. This event not only affected short sellers but also pushed Ethereum's open interest above $12 billion, reflecting a renewed appetite for leveraged long positions. The liquidation of short positions also helped to restore confidence across the Ethereum ecosystem, which had struggled to regain liquidity after a drop to $1,400 earlier this year.

DeFi protocols like Lido and

experienced inflows, while Ethereum’s total value locked (TVL) rebounded to over $59 billion. On-chain activity also surged, with more than 450,000 daily active wallets recorded during the rally. However, Ethereum’s dominance remains subdued at 8.4%, with Bitcoin still commanding 60.4% of the market after its own breakout above $103,000.

While the ETH rally sparked optimism, analysts warn that the market may have entered overbought territory, increasing the risk of short-term corrections. Ethereum’s lending sector, still recovering from earlier declines, holds $902 million in loans, most of which would only liquidate at sub-$1,400 levels, insulating the system from immediate downside risk. The sustainability of Ethereum’s surge may hinge on broader market trends and the ongoing impact of recent upgrades like Pectra, as well as continued institutional accumulation.