Dencun Upgrade Live on Mainnet, Can Ethereum Surpass $5,000?

Key Takeaways

  • Ethereum's Dencun upgrade promises to reduce transaction fees and improve scalability.
  • Bullish market sentiment, fueled by the Dencun upgrade, anticipates Ethereum's price to reach $5,000.
  • Despite high anticipation, historical data suggests network upgrades may not significantly impact cryptocurrency prices.

On March 13, the long-awaited Dencun Upgrade went live on the Ethereum (ETH) mainnet. The crypto market is anticipating a reflective surge in Ether’s price.

The Dencun deployment went live around 2 pm UTC. It was programmed to add a new layer of technology known as EIP-4844, also referred to as proto-danksharding.

This innovation promises to reduce transaction fees on Layer 2 solutions, a major problem that has long affected Ethereum’s scalability.

Crypto Bullish Sentiment Rides the Ethereum Dencun Wave

The Dencun upgrade isn’t the only factor responsible for Ethereum’s recent price surge. The cryptocurrency market has witnessed large capital inflows for a while, with Bitcoin and Ethereum receiving the most.

This Bull market sentiment and the potential benefits of the Dencun upgrade have influenced crypto traders, investors, and analysts alike. Some are now predicting a bullish rally for ETH, with a potential price target of $5,000 emerging as a popular forecast.

When the Dencun update launched, Ether’s price surged to $4,009.29 at exactly 2:00 p.m., reflecting a $25.52 billion 24-hour trading volume.

ETH price | Credit: CoinMarketCap
ETH price | Credit: CoinMarketCap

The anticipation surrounding the Dencun launch pushed Ethereum prices past $2,500 and even $4,000 in the past month.

Now that the Dencun upgrade is live, traders expect 1 ETH to trade for $5,000. However, according to Etherescan data, gas fees on the mainnet remain high at 72 gwei despite the upgrade.

Historical Impact of Blockchain Network Upgrades

Traditionally, network upgrades like Bitcoin’s Taproot and Ethereum’s Merge haven’t resulted in notable price fluctuations of crypto assets.

A Singapore-based trading firm, QCP Capital, pointed out that the current market dynamics could lead to a phenomenon known as “price reflexivity” for Ethereum and its Layer 2 solutions.

This reflexivity could be influenced by the Dencun upgrade and a likely capital inflow to the Layer 2 ecosystem.

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