Dencun upgrade

YEREVAN ( — Ethereum (ETH) could lose 10% of its market valuation ahead of the Dencun Upgrade Mainnet launch in March 2024, based on several technical indicators. However, before diving into the Upgrade news, let’s look at the charts.

ETH Charts Bearish Despite Dencun Upgrade

The Ethereum daily chart indicated that ETH has been trading within a rising channel since June 2022. The channel features two parallel rising trendlines that enclose the price action by connecting swing highs and lows.

The channel does not predict a bias after the token leaves the formation. However, if the setup remains relevant, it could be instrumental in predicting short-term price fluctuations. ETH broke the channel’s resistance on Jan. 10, possibly based on the spot Bitcoin ETF euphoria. However, the bulls failed to hold the altitude, and ETH fell back into formation.

Ethereum Dencun Upgrade
Ethereum (ETH) price. Source: TradingView

On Feb. 9, ETH/USD approached the resistance again. Thus, the coming sessions would determine if the leading altcoin can break above the trendline confidently. If ETH retests the resistance, the likely target will stand near $2,200, a 10% drop from the current value.

Additional Bearish Factors Could Tank ETH

The chart above also points to a relative strength index (RSI) divergence. In detail, the RSI is a gauge of the most profitable market entry and exit points based on investor expectations. An RSI divergence is a dissonance between the indicator and the price action.

While the Ethereum coin price printed higher lows, the RSI, conversely, insisted on lower lows, creating the mentioned divergence. It is considered to be a strong hint of a looming decline. The RSI divergence also backs the channel’s short-term bearish prediction.

Ethereum Dencun Upgrade Coming in March

On Feb. 7, the Dencun Upgrade launched on the last testnet, Holesky. Ultimately, Ethereum’s core developers have set a launch date for the Dencun upgrade on the mainnet.

Tim Beiko from the Ethereum Foundation revealed that the upgrade will activate at slot number 8626176, with an anticipated rollout on Mar. 13, 2024. Additionally, Beiko shared on X that the upgrade will bring in blob transactions and transient storage features.

In detail, the Upgrade focuses on enhancing Ethereum scalability, security, and efficiency. It comprises two parts, Deneb and Cancun, spread across nine Ethereum Improvement Proposals (EIPs).

Several EIPs, including the mentioned EIP-4788, 6780, and 7514, focus on enhancing security at both the user application and consensus levels. Also, several proposals aim to improve the stakeholder user experience and block confirmation times.

For example, EIP-7044 makes voluntary exits in delegated staking perpetually valid, and EIP-7045 extends the time for validators to submit attestations.

The Dencun upgrade is a part of Ethereum’s long-term development strategy, particularly its “Surge” phase, aiming to scale performance to 100,000+ transactions per second (TPS). It continues Ethereum’s evolution following the Shanghai hardfork and is crucial in establishing Ethereum as a scalable, decentralized, and globally accessible settlement layer.

Ethereum Dencun Upgrade on the Roadmap
Ethereum Dencun Upgrade on the RoadmapSource:

The team initially planned the upgrade for late 2023 but rescheduled it for 2024 due to deployment and consensus issues. The final dates for public testnets were:

  • Goerli: Jan. 17, 2024
  • Sepolia: Jan 30, 2024
  • Holesky: Feb. 7, 2024

As mentioned, Ethereum plans for the mainnet launch on Mar. 13, 2024. However, the date could be subject to change.

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