Ether (ETH) rallied to a new lifetime high on Thursday on speculation an impending blockchain upgrade might result in a drop in supply.

The native cryptocurrency of Ethereum’s blockchain rose to a record high of $2,564 during European trading hours, toppling the previous peak price of $2,546 reached on April 16, according to CoinDesk 20 data.

“Ethereum’s net annual issuance will drop substantially following the Phase 1.5 ETH 1 to ETH 2 merger,” Messari’s research Wilson Withum tweeted.

With the upcoming EIP 1559 upgrade, ether will “become a deflationary asset,” Nick Spanos, co-founder of Zap Protocol, told CoinDesk. “This feature will reduce the coin supply and have a corresponding effect on the price, creating an attraction point for more buyers.”

Ether has been on a tear of late, outperforming bitcoin (BTC) by a wide margin. Ether has gained 35% this month while bitcoin is down about 8%.

Analysts studying ether-bitcoin (ETH/BTC) chart patterns say ether’s outperformance could continue in the near term.

“ETH/BTC is getting a lot of attention as it broke above its long-term resistance of 0.04,” Pankaj Balani, co-founder and CEO of the Singapore-based Delta Exchange, said. “We might see ETH-BTC push through 0.10. Expect sharp moves though, first to 0.06 in the coming weeks and subsequently to 0.1.”

ETH/BTC is currently trading at 0.046 on Binance, according to data provided by TradingView.

Also read: Ethereum’s ‘EIP 1559’ Fee Market Overhaul Greenlit for July