Ethereum (ETH) Price Plummets After Dencun Upgrade
The world’s second-largest cryptocurrency, Ethereum (ETH), is experiencing a sharp decline in price following the successful implementation of the Dencun upgrade. The price of Ethereum has dropped by 7.8% to $3,669, with a market cap just below $450 billion. Additionally, the daily trading volume in Ethereum has surged by 45% to $32.29 billion.
Ethereum (ETH) Price Levels to Watch
The Ethereum price encountered resistance at the $4,000 level and has started a downward correction, similar to Bitcoin’s movement. It has fallen below crucial support levels at $3,920 and $3,850, indicating a short-term bearish trend.
- It briefly dipped below the $3,680 support area, reaching a low of $3,625 before consolidating losses.
- A significant bearish trend line is forming with resistance around $3,850.
- The primary resistance levels are near $3,850 and the trend line, close to the 50% Fibonacci retracement level from the recent swing high at $4,083 to the low of $3,625.
If the Ethereum (ETH) price surpasses the $3,880 resistance, it may regain bullish momentum and target the $4,000 level. However, failure to break above $3,850 could lead to further downside movement.
- Initial support is at $3,680.
- A major support zone near $3,600 could serve as a potential downside target at $3,500.
- A decisive break below $3,500 might trigger a decline toward $3,350.
Notably, crypto analyst CrediBULL Crypto suggests that the $3,600-$3,700 range for Ethereum is likely to attract significant buying interest in the short term.
In addition, blockchain analytics firm Elliptic has uncovered a substantial transaction involving $12 million worth of Ether conducted by the Lazarus Group. This transfer was facilitated through Tornado Cash, a cryptocurrency mixer. Despite being subject to sanctions, the North Korean hacker organization has resumed its use of this platform.
The funds can be traced back to a cyber-attack on HTX and the Heco Bridge in November, orchestrated by the Lazarus Group. The attack resulted in significant losses of $100 million for the affected platforms.
ETH Gas Fee Drops Below $10
According to on-chain data provider Santiment, the current situation of Ethereum surpassing a $4,000 market value differs from October and November 2021. The network’s transaction costs are significantly lower now, averaging at $9.35, which is less than 1/6th of the previous levels. This improvement can be attributed in part to the enhancements in network fees following the transition to Ethereum 2.0.
Hot Take: Ethereum Faces Selling Pressure Following Dencun Upgrade
The recent implementation of the Dencun upgrade has caused a sharp decline in the price of Ethereum (ETH). Despite surpassing the $4,000 mark, Ethereum is currently facing resistance and has initiated a downward correction. The price has dropped below key support levels and is now consolidating losses.
However, there is still potential for bullish momentum if Ethereum manages to break above resistance levels. On the other hand, failure to do so could lead to further downside movement.
In addition to price volatility, concerns have been raised regarding the use of cryptocurrency mixers by hacker organizations. The Lazarus Group, a North Korean group subject to sanctions, has resumed its use of Tornado Cash to facilitate transactions involving significant amounts of Ether.
Despite these challenges, Ethereum’s transition to Ethereum 2.0 has resulted in lower transaction costs, providing some relief to users. The average gas fee is now below $10, significantly lower than previous levels.
As the cryptocurrency market continues to evolve, it is important for investors and traders to stay updated on the latest developments and trends in order to make informed decisions.
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