ETH New Upgrade Causes Price Trembling - What Happened?

ETH Dencun Upgrade is Followed by Price Dips: What’s the Outlook?

Price Analysis
15 March 2024

In a significant market uptrend, when most crypto coins and blockchains are experiencing huge demand and price action, Ethereum introduced a new network update to double down on its surging value.

The ETH Dencun upgrade went live on March 13th, causing huge optimism among investors and holders. Surprisingly, the price recorded a noticeable slip despite the market heating that’s taking every coin and token to the moon.

An Ethereum price correction happened shortly afterwards. However, users were questioning the price dip, and some switched to other cryptos while hodlers kept the faith. What happened? And what is the new ETH update? Let’s discuss. 

Understanding ETH Dencun Upgrade

ETH Foundation introduced a new addition as a part of the Ethereum merge update, also called “The Surge”, as the developers add more rollups and forks that improve processing speed, interoperability and layer-2 operations.

This update focuses on data sharding and scalability, creating layer-2 and off-chain networks, such as Avalanche and Polygon. This can boost the network’s usability, adoption, and demand.

The ETH Dencun upgrade was introduced as a hard fork, and according to the roadmap, it happened to coincide with the ongoing market uptrend. However, prices fluctuated a little, shaking investors’ confidence and raising questions.

What is Ethereum Proto-Danksharding?

Danksharding is the new chapter of Ethereum, which was introduced in 2022, highlighting a major switch from the proof of work to the proof of stake consensus mechanism. Parallely, sharding refers to splitting the blockchain into smaller chunks of data for faster and cheaper operations.

Proto-sharding, however, is a new way for rollups without using the entire network and adding more workload to nodes. This way, data are added to the chain as temporary data blobs that are erased after a fixed period of time. This helps reduce the congestion on the network.

Ethereum Performance 2024

Ethereum recorded a new price mark that has not been reached since the last bull run in 2021. As the entire market experiences overheating and most cryptos surge, ETH broke through the $3,000 level and scratched the surface of $4,000.

However, the Dencun upgrade announcement impeded this growth, as prices dropped below $3,900 after almost hitting the $4,100 threshold.

It is hard to predict the outcomes of network updates, as previous additions drove prices up and down shortly before correction.

ETH Price Analysis

Let’s review the ETH price in detail, along with the exponential moving average indicator, to analyse the short-term and long-term trends as a result of the latest price changes.

Firstly, we compare the EMA indicator between 50-day and 100-day levels. Here, we see how the short-term line (in blue) moved far away from the longer-term line (in yellow) since the beginning of February, indicating a strong upward trend.

However, we have also noticed a stronger disparity in recent days, indicating continuous growth despite the short price slump.

ETH 10-day EMA

Let’s get more detail and review the EMA price line taking 10-day vs 200-day EMA as the indicator gives more weight to recent price data.

ETH 200-day EMA

Here, we see how the 10-day line shoots way above the 200-day line, indicating even a stronger upward trend for the ETH price. However, if we look carefully at the blue line, we see how the trend line slowed down in reflection of the latest price drop.

However, it remains way above its average 100 and 200 days, suggesting a potential for stronger price surges.

Conclusion: Ethereum Price Prediction for 2050

The network developers already started working on the Ethereum next update, called the Electra + Prague (Petra). However, we are yet to know what will be included in the new package. Probably a rollup to decrease transaction fees even lower?

Despite the huge impact of the ETH Dencun upgrade on future use cases and interoperability, it is hard to make the next ETH price prediction. However, with the thriving crypto market, it is fair to say that the coin might be aiming toward the $5,000 level.

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