Ethereum: Crypto Analysts Predict Price Drop Ahead of Dencun Upgrade

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Ariela R.

The Ethereum blockchain is set to undergo a major transformation with the Dencun upgrade. This long-awaited upgrade promises to revolutionize the scalability and efficiency of the Ethereum network and pave the way for significant changes in the cryptocurrency market.

Ethereum review
Ethereum (ETH) price may be disrupted before Dencun update

Dencun Ethereum Upgrade: Promise of Increased Scalability

The core of the Dencun upgrade is “proto-danksharding”. It is a technical innovation aimed at significantly reducing transaction costs for layer 2 blockchains.

This major breakthrough could solve the scalability issues currently holding Ethereum back. This would really allow the crypto network to potentially process up to 100,000 transactions per second. Such a capability would make Ethereum an ideal crypto platform.

The real goal of the Dencun upgrade is to support the expansion of Ethereum, thereby increasing the TPS of the main blockchain and reducing gas fees for users, while strengthening scalability and security, as well as improving network performance. With the Dencun upgrade, Ethereum throughput is expected to increase more than 100 times, and transaction costs at layer 2 should drop below $0.001. The first beneficiary will be the Layer 2 network, which will support widespread user adoption. At the same time, low gas fees and high throughput will support the development of high-frequency trading and high-performance applications such as derivatives trading and gamification.

Gracy Chen, CEO of Bitget

What are the implications for cryptocurrency investors and developers?

The increased transaction processing capacity and reduced costs brought about by the Dencun upgrade could attract a wave of new developers and users to the Ethereum ecosystem.

This increased acceptance would increase the demand for ETHpositively affecting its price. In addition, the upgrade could support increased diversification of the Optimism (OP) ecosystem and better availability of ZK-Rollups applications.

The Ethereum Price: Contrasting Perspectives

Analysts like QCP Capital are predicting a correction in ETH price with the upcoming upgrade. They emphasize increase in short positions on Ethereum options. This indicates some concern among investors about a possible drop in prices. This trend could be explained by the desire to protect oneself from the risks associated with investing in altcoins.

Analysis of market indicators is also revealing mixed signals.

  • On the one hand, the risk reversal for ETH has turned negative. This suggests concerns about falling prices.
  • On the other hand, Ethereum spot-forward spreads narrowed slightly. This implies some confidence in the stability of the price.

At the time of writing, the price of Ethereum (ETH) was is $4,047.

Despite the short-term uncertainties, Dencun’s upgrade represents a major milestone for Ethereum. To be continued…

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Ariela R. avatar

Ariela R.

My name is Ariela and I am 31 years old. I have been working in the field of web development for 7 years. I only discovered trading and cryptocurrencies a few years ago. But it’s the universe that interests me a lot. And the topics covered within the platform allow me to learn more. A singer in my spare time, I also have a great passion for music and reading (and animals!)


The comments and opinions expressed in this article are solely those of the author and should not be considered investment advice. Before making any investment decision, do your own research.

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