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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.
Dencun went live, we've had blobs land in blocks on mainnet .oO ??
— timbeiko.eth (@TimBeiko) March 13, 2024
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.
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 $5,000. However, according to Etherescan data, gas fees on the mainnet remain high at 72 gwei despite the upgrade.
I can't wait until GWEI over 150-200+ all day every day is the new normal when Ethereum reaches 5k+ in a few months & airdrop farmers will have to pay between 500-1000$ just to claim airdrops on ETH Mainnet.
If you staked anything less than 3 $ETH worth in stuff like Eigenlayer… pic.twitter.com/XnTVcpDhs5
— SteelHard (@SteelHard9) March 5, 2024
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.
Congrats Ethereum devs on the successful Dencun upgrade.
True chads executing complex code flawlessly yet again.
Big day for rollups as gas fees now come down significantly.
Enjoy the cheaper txns. pic.twitter.com/NYPNAyREq7
— Aylo (@alpha_pls) March 13, 2024
This reflexivity could be influenced by the Dencun upgrade and a likely capital inflow to the Layer 2 ecosystem.
