Focus Shift: Ethereumโs Decun Upgrade and Potential ETH ETF Approval
In 2024, Bitcoin has been the primary focus for crypto investors due to the launch of the Spot BTC ETF. The US SECโs approval of 11 new ETFs in January resulted in a significant influx of capital from the traditional market, driving Bitcoin to a new all-time high of $72,600.
However, analysts predict that attention may now shift to Ethereum, the second-largest cryptocurrency, as it prepares for the Decun upgrade and potential approval of an ETH ETF this year.
Enhancing Scalability with Proto-dank Sharding
The Decun upgrade for Ethereum introduces proto-dank sharding, a technology that aims to improve the networkโs scalability and efficiency by optimizing data storage and access. This development is a precursor to full sharding technology and aims to reduce costs associated with Layer 2 rollups, which are crucial for Ethereumโs scalability.
The introduction of proto-dank sharding will benefit Layer 2 projects by:
- Driving greater adoption
- Offering new opportunities for integration and innovation
1) Arbitrum (ARB)
Arbitrum is a leading Layer 2 scaling solution for Ethereum that focuses on improving transaction scalability and efficiency. By utilizing Optimistic Rollup technology, Arbitrum enables smart contract execution and faster transactions while maintaining Ethereumโs security.
The recent analysis indicates that the upgrade will significantly decrease transaction costs for decentralized exchange (DEX) swaps:
- The gas fee for utilizing Arbitrum is expected to drop from $2.02 to $0.4.
Currently, the ARB price is experiencing a sideways trend under the influence of a triangle pattern. A recent reversal from the patternโs resistance trendline caused a 12.2% loss within a week, dropping the altcoin from $2.27 to $2.
In the last 24 hours, the Arbitrum market cap decreased to $2.5 billion, while trading volume surged 10.8% to reach $763 million. If there is a potential breakout from the triangle pattern, the ARB price may target $2.42 and $3.2.
2) Optimism (OP)
Optimism operates as another Layer 2 scaling solution for Ethereum, aiming to enhance transaction throughput, reduce gas fees, and maintain security and decentralization principles.
The Decun upgrade scheduled for March 13 will lead to a gas fee reduction from $1.42 to $0.28. The native cryptocurrency of the network, OP, has shown steady recovery using an ascending trendline in the daily chart:
- The OP price increased from $1.16 to $4.3, registering a 275% growth within five months.
Currently, the OP price faces renewed supply pressure at $4.85, which may trigger a correction and potentially drop the altcoin to support levels around $4.2 and the rising support trendline.
3) StarkNet (STRK)
StarkNet is a decentralized Layer 2 scaling solution for Ethereum that utilizes STARK-proof technology for high scalability and privacy. Developed by StarkWare, it enables off-chain transaction processing while leveraging Ethereumโs mainnet security and composability.
The upgrade will result in a significant decrease in Dex Swap Cost for StarkNet, dropping from $1.16 to $0.12. Amidst Bitcoinโs price rally above $70,000, the STRK price rebounded from $1.744 to $2.67, marking a 53% growth.
Currently, the StarkNet market cap dropped by 1.41% to $1.75 billion, while trading volume decreased by 5.47% to $505 million. Potential overhead supply levels for the STRK price are at $2.75 and $3.08, while suitable support levels can be found at $2.248 and $1.92.
Takeaway: A More Robust Ethereum Network
The upcoming Decun upgrade on the Ethereum network will enhance scalability, fortify security, and improve overall network efficiency. This advancement will benefit Layer 2 projects by driving greater adoption and facilitating integration and innovation.
Hot Take: Ethereumโs Decun Upgrade Sparks Investor Interest
The Decun upgrade and potential approval of an ETH ETF have sparked a shift in investor focus towards Ethereum. With improvements in scalability and efficiency, Ethereum is poised for further growth and development in the crypto market.
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