Ethereum price beats crypto market bloodbath nearly a week away from Dencun upgrade
- Ethereum price rallied over 5% on Wednesday despite the crypto market correction led by Bitcoin price decline.
- Ethereum Dencun upgrade,scheduled for March 13, is expected to lower transaction costs for Layer 2 chains.
- Staked Ethereum climbed to $118 billion, as ETH holders prepare for EIP-4844 arrival on the mainnet.
Ethereum (ETH) price climbed on Wednesday while several other cryptocurrencies wiped out their recent gains following Bitcoin’s price rally and its subsequent pullbackon Tuesday. Ether resumed its recent uptrend towards the psychological $4,000 target despite mass profit-taking by holders.
The Dencun upgrade, a key technical development on the Ethereum mainnet, is scheduled to go live on March 13. The upgrade marks an important milestone for Layer 2 chains and rollups.
Also read: Ethereum price poised for gains as Dencun upgrade goes live on the testnet
Ethereum gears up for gains ahead of Dencun upgrade
The Dencun upgrade is the most significant upgrade for the Ethereum blockchain since the Merge, where the chain shifted its consensus mechanism from Proof-of-Work to Proof-of-Stake. Developers have set March 13 as the date for Dencun’s mainnet release.
The upgrade is popular for its “proto-danksharding,” a feature through which the chain uses blobs, which reduce the burden on the underlying blockchain and lowers costs for Layer 2 chains and rollups that depend on the Ethereum chain. This is possible with EIP-4844, one of the key Ethereum Improvement Proposals that is part of the Dencun upgrade.
With the successful completion of the Sepolia and Holesky testsnets, Dencun is ready for its deployment and smooth implementation on the Ethereum mainnet.
The Dencun upgrade, also known as a hard fork, will trigger when Ether’s blockchain reaches the slot 8626176.This is expected to occur at 13:55 GMT on March 13.
Dencun upgrade, a game changer for Layer 2 chains
Dencun has significant implications for Layer 2 chains. The development upgrade is packed with EIPs to enhance scalability by processing transactions off-chain while offering L2 protocols the security of the Ethereum mainnet.
The key EIPs in the Dencun upgrade are EIP-1153, EIP-4788, EIP-5656, EIP-6780, EIP-7044, EIP-7045, EIP-7514, and EIP-7516. These improvement proposals are set to facilitate the expansion of operations in Layer 2 protocols.
Existing Rollup technologies like Arbitrum, zkSync, StarkWare, and Optimism heavily utilize the Ethereum mainnet for security, so these projects stand to benefit from the upgrade. This is expected to drive further adoption and boost these projects’ utility.
Ethereum price inches closer to $4,000 target
Ethereum price is $3,819 at the time of writing. The altcoin is rallying towards its psychologically important $4,000 target on Wednesday after Bitcoin price hit a new all-time high on Tuesday. Both coins are highly correlated, with the three-month correlation co-efficient at 0.95.
The value of staked Ether has climbed to $118 billion as of Wednesday, further reduces the circulating supply of the altcoin and paving the way for the rally to continue. Despite consistent profit taking – $1.969 billion since the beginning of March, according to data from Santiment –, the altcoin has climbed higher and has no significant resistance in its path to $4,000.
The Moving Average Convergence/Divergence (MACD) indicator and the Awesome Oscillator (AO) support Ethereum’s gains.
ETH/USDT 1-day chart
A daily candlestick close below the 23.6% Fibonacci resistance at $3,432 could invalidate Ethereum’s bullish thesis. In the event of a decline, ETH price could nosedive to the 38.2% Fibonacci retracement at $3,190.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
