- Ethereum’s Dencun upgrade is scheduled for March 13th.
- Positive sentiment can influence the price of Ethereum, but volatility can be expected.
At their bi-weekly meeting this week, Ethereum (ETH) developers designated March 13 as the expected date for the long-awaited Dencun upgrade, beginning a countdown to the blockchain’s most significant changes after April 2023.
expectations rise
The Dencun upgrade is particularly recognized for its “proto-danksharding” feature, which is designed to lower transaction costs on secondary layer 2 networks built on Ethereum by providing dedicated storage for data.
This decision was communicated at Allcore Developer Consensus Layer Call 127, one day after successfully implementing the upgrade without any issues on the Holesky testnet, the third of three test networks.
The exact activation of the Dencun upgrade on the main Ethereum network, referred to as a “hard fork”, is set to occur in slot 8626176 on March 13 at exactly 13:55 UTC.
However, the date requires verification by the developer and confirmation via the open source software platform GitHub. Dencun’s introduction of “proto-dank sharding” will help reduce transaction costs for rollups by introducing a new transaction class, data “blobs” as a new category for data storage.
Will ETH rise?
This upgrade will make transaction costs more affordable, attracting more users and increasing overall network activity.
Positive sentiment surrounding a major upgrade often helps boost investor confidence.
As Ethereum becomes more efficient and user-friendly, it can attract new investors and encourage existing investors to hold on to their Ethereum holdings. This increase in demand could potentially push the price of Ethereum higher.
These positive developments often contribute to an optimistic outlook for Ethereum, influencing investor perception and potentially leading to price increases.
However, updates like this can also impact “buy on the rumor, sell on the news” events, where large build-ups occur before an anticipated event occurs, but prices plummet as soon as that event occurs. This behavior was seen by traders when Ethereum switched from proof-of-work to proof-of-stake during the “merge” update.
Realistic or not, the market cap of ETH relative to BTC is:
At press time, ETH was trading at $2,457.59, with the price up 1.48% over the past 24 hours. The number of addresses holding ETH also increased during this period.
ETH’s network growth also increased during this period, meaning that new addresses are showing interest in Ethereum. As accumulation increases, volatility around the ETH price will also increase.
Source: Santiment