Thursday saw a lull in the Ethereum price surge after a week of excitement among cryptocurrency investors. The main topic of discussion was the possible legalization of Bitcoin spot exchange funds (ETFs), which was spurred by telltale indications that the US Securities and Exchange Commission (SEC) was becoming receptive to the concept.
Alongside Bitcoin, the second-largest cryptocurrency also experienced a breakout, which appeared to halt the long-term downward trend. Ether rose above $1,800 for the first time since August, however it had fallen from highs above $1,864 to trade at $1,781 on Friday. Due to investors hurrying to capitalize on price pumps, transaction costs for Bitcoin and Bitcoin have increased significantly over the past week, according to blockchain analytics company IntoTheBlock.
The cryptocurrency markets had a thrilling week. Double-digit price increases for Ether and Bitcoin both contributed to a strong positive mood.
During the price surge, there was a 44.8% increase in Bitcoin fees due to an increase in transaction activity.
The cost of Ethereum increased much further, tweet.com/kRrgQ7o4ru
— October 27, 2023, IntoTheBlock (@intotheblock)
The price of ether consolidates its gains; will it rise once more?
As seen in the chart below, the largest smart contracts token is rising above a falling wedge pattern, indicating that traders and investors who are rooting for the bull run have adopted Ethereum widely.
With this move, there has been a first-time substantial breakthrough over a multi-month trendline since April, when the positive picture for the first few months of 2023 began to fade above $2,138.
As investors resisted the need to jump at the first hint of profit, price behavior beyond all three applicable moving averages—the 21-day Exponential Moving Average (EMA) (red), the 100-day EMA (blue), and the 200-day EMA (purple)—encouraged traders to maintain their holdings.
A huge spike in trading volume coincided with the breakout of the falling wedge pattern, which set the stage for a huge rally.
Bulls would be waiting for Ethereum’s price currency to hold above the 38.2% Fibonacci retracement line in order to continue the upward trend.
Given that the Relative Strength Index (RSI) indicates that a downturn is likely, traders should act cautiously but avoid selling in a panic. There may be dips if the RSI leaves the overbought region and returns to the neutral zone, prompting traders to close positions in order to preserve their gains.
The Dencun Upgrade Is Expected to Increase Scalability by the Ethereum Community
“Primary impact will be to increase its data availability for layer-2 rollups via proto-danksharding, resulting in a reduction of rollup transaction costs which will be passed on to end users,” the paper said regarding the upgrade.
Referred to as off-chain systems or even distinct blockchains, Layer 2 protocols are constructed on top of the Layer 1 blockchain, in this case Ethereum.
Rollups work by processing transactions more quickly and inexpensively on secondary, more scalable blockchains, which subsequently lodge the transactions onto the parent blockchain (layer 1).
The Dencun update is anticipated to have a favorable impact on “gas fees and improve the network’s security” and will “significantly enhance Ethereum’s scalability via rollups.”
This would be the next significant development following Shapella, which allowed Ethereum to reach full staking status. Stated differently, investors were able to withdraw their staked Ether on the Beacon Chain along with their payouts after the update.
The Shapella update significantly increased Ethereum staking, particularly on liquidity staking sites like Lido and Rocket Pool.