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Ethereum Could Hit $3,500 Soon After Dencun Upgrade

Ethereum was positioned at 50% below its previous all-time high. However, an analyst suggests that the recent technological upgrade called Dencun has the potential to propel ETH to higher price levels.

Fri, 09 Feb 2024, 09:54 am UTC

Michael van de Poppe, the Founder and CEO of MN Trading, has expressed optimism about the prospects of Ethereum (ETH), the second-largest cryptocurrency by market capitalization.

According to van de Poppe, ETH shows signs of a resurgence in price movements and appears poised to undergo a significant rally of over 50% soon.

Dencun Upgrade Fueling Ethereum's Momentum

Van de Poppe attributes the anticipated price surge to the upcoming Dencun upgrade, a pivotal enhancement to Ethereum's blockchain architecture to enhance transaction capacity and data availability. This upgrade is expected to boost ETH's performance in the market substantially.

According to CoinGecko data, ETH was trading at approximately $2,400 at the time of Writing. However, van de Poppe foresees the price soaring to as high as $3,500 in the near term. It's worth noting that Ethereum reached its all-time high of $4,878 during the peak of the 2021 bull run.

Key Features of the Dencun Upgrade

The centerpiece of the Dencun upgrade is proto-danksharding, a critical feature outlined in Ethereum Improvement Proposal (EIP) 4844.

This addition is expected to significantly enhance layer-2 networks by introducing an additional data field called a "blob." Developers anticipate this enhancement will enable layer-2 solutions such as Arbitrum, Optimism, and Polygon to access greater transaction bandwidth without experiencing longer processing times on Ethereum's main network.

Dencun is being hailed as one of the most significant upgrades to Ethereum since the implementation of staked ETH withdrawals following the platform's transition to a proof-of-stake consensus mechanism, commonly known as The Merge.

According to Crypto News, the deployment of the Dencun upgrade is scheduled for March 13th, pending any unforeseen delays. Successful testing has been conducted on major Ethereum testnets, including Goerli, Sepolia, and the most recent addition, Holesky.

Potential Catalysts for Ethereum's Rally

In addition to the Dencun upgrade, approving a spot Ethereum exchange-traded fund (ETF) is another potential catalyst for ETH's upward trajectory.

According to Coin Gape, regulatory bodies such as the U.S. Securities and Exchange Commission (SEC) have delayed their decisions until May.

Individual commissioners have expressed differing opinions regarding the classification and regulation of cryptocurrencies, adding uncertainty to the approval process. Nonetheless, the potential introduction of an ETH ETF could further bolster Ethereum's market performance in the coming months.

Photo: Kanchanara/Unsplash

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