Ethereum‘s much-discussed Dencun upgrade is drawing near, with March 13 marked as the anticipated rollout date. This update is poised to bring significant improvements to the blockchain, particularly to benefit Layer 2 (L2) solutions through fee reductions. With the Dencun upgrade, Ethereum developers are focusing on facilitating the growth of L2 by implementing a new Ethereum Improvement Proposal known as proto-danksharding.
Impending Ethereum Upgrade Spurs Network Fee Increase
In the wake of the postponed Shapella upgrade, Ethereum is gearing up for its next substantial upgrade, Dencun. This update will tackle changes in both the consensus and execution layers of Ethereum, honing in on fee reduction to boost L2 scalability. As developers gear up for the release, Ethereum has seen a spike in network fees. Data from Artemis shows a significant rise in ETH fees on March 5, coinciding with an increase in Ethereum’s revenue that day. This uptick in fees corresponds with a surge in gas prices to 64.39 Gwei per Ycharts metrics.
Market Dynamics and On-Chain Activity
While fees are on the rise, Ethereum has witnessed a downturn in network activity, with a decline in daily active addresses since the end of February. Despite this dip in on-chain interaction, Ethereum’s price trends have been positive, with a more than 9% increase over the past week. Ethereum’s trade price currently sits at $4,034.42, with a market capitalization exceeding $484 billion.
The digital currency maintains a high social volume, keeping it at the forefront of market discourse. The weighted sentiment has shown a quick uptick, suggesting strong bullish sentiment surrounding Ethereum. The technical MACD indicator supports this bullish market trend, while the Chaikin Money Flow index has also risen, hinting at a potential continued uptrend. However, Ethereum’s price has touched the upper boundary of the Bollinger Bands, which might suggest an upcoming price correction.