- Following a successful series of testnets in the past months, the Dencun upgrade is expected to happen on the Ethereum mainnet on March 13.
- The Dencun upgrade will enhance Ethereum’s scalability through five EIPs with the most important being the EIP-4844 also called the proto-danksharding.
The Ethereum (ETH) ecosystem is preparing to undertake its largest network upgrade since the Shanghai upgrade last year dubbed the Dencun upgrade in the coming weeks. Ethereum’s core developers led by co-founder Vitalik Buterin have been working on lowering the transaction fees and increasing the overall scalability of the layer two ecosystems.
Furthermore, the Ethereum network has faced significant competition from other smart contract-based blockchains like Solana (SOL), Cardano (ADA), and BNB Smart Chain (BSC), among others. Nevertheless, the Ethereum network remains the undisputed champion in the web3 industry with more than $38 billion in Total Value Locked (TVL) and over $70 billion in the stablecoins market cap.
Closer Look at the Ethereum Dencun Upgrade
The highly anticipated Dencun upgrade also known as the Cancun-Deneb is expected to be finalized on the Ethereum mainnet before the end of the first quarter of 2024. The upcoming Dencun upgrade is a clear focus on improving the underlying Ethereum scalability through the creation of data blobs, a transaction type that is meant to scale the data availability for layer two rollups.
However, Ethereum’s core developers have been subjecting the Dencun upgrade to a series of upgrades including on the Devnet9, Devnet10, Goerli, Holesky, and Sepolia before finally being hard forked on the mainnet.
According to the Ethereum core developers, end users should expect the impact to be felt as early as March 13, 2024, when the Dencun upgrade is expected on the mainnet. Notably, the upgrade date was scheduled by Ethereum developers in an AllCoreDevs call on February 8, following a successful deployment on the Holesky testnet on February 7.
Blobs are coming to Ethereum mainnet
13 March 2024, 13:55:35 UTC
— Nethermind (@NethermindEth) February 8, 2024
The transactions on Ethereum’s rollups are on the cusp of becoming even cheaper amid the already confirmed bull market. As a result, the Ethereum network can continue running as the leader in decentralized smart contracts despite the emerging competition.
Impact on ETH Price Action and Market Outlook
Ethereum (ETH) price has recently been following Bitcoin’s footsteps in the macro bullish breakouts. The large-cap altcoin with a fully diluted valuation of about $301 billion has successfully retested the breakout from an ascending triangle and now aims for the next bull run in the coming months.
Meanwhile, the weekly Relative Strength Index (RSI) has been showing a bearish divergence amid a rising market, which could trigger a sudden market correction. Nevertheless, the heightened demand for Ethereum from institutional investors as shown by the several spot ETH ETF applications in the United States could fuel the underlying bullish momentum.
HERE WE GO AGAIN: ARK/21Shares has just filed an amended S-1 for their spot Ether ETF, looks like they updated to be only cash creations and some other things that bring it in line w the recently approved spot btc etf prospectus.. pic.twitter.com/clN2oZmA6I
— Eric Balchunas (@EricBalchunas) February 7, 2024
From a technical perspective, Ethereum’s bullish momentum is bolstered by the weekly golden cross between the 50 and 200 Moving Averages (MA).
According to the weekly Auto Fib Retracement indicator, the next ETH price targets are between $3,147 and $3,769, which coincides with the 2.618 level and 3.618 level respectively. Meanwhile, Ethereum price has rallied about 8% in the past week to trade at $2450.