The cryptocurrency market is enduring a steep decline, specifically impacting Bitcoin and Ethereum. Bitcoin’s price has recently dipped below a critical threshold, raising concerns over a potential chain reaction of selling pressure among other cryptocurrencies. Ethereum, on the other hand, is on the cusp of a significant network upgrade that could alter its transaction fee structure and increase network activity.
Ethereum’s Imminent Network Upgrade
Ethereum is set to implement a substantial update, dubbed ‘Dencun’, within the next 15 hours. While not as technically demanding as its previous shift to Proof of Stake (PoS), this upgrade is expected to have a crucial effect on the network’s transaction costs and overall activity levels. The recent Merge, which transitioned Ethereum to PoS, resulted in a deflationary tokenomics model. Now, the Dencun update might reduce fees further and potentially enhance the network’s attractiveness.
Bitcoin’s current value is wavering around $70,700, a concerning sign given the imminent Ethereum update. Should Bitcoin’s price have been above $72,000 during Dencun’s activation, Ethereum’s price might have seen a boost, favorably affecting the tokens of Ethereum layer2 solutions.
Ethereum’s bulls are currently defending the $3,830 level, but a drop below the $4,000 mark might dampen their spirits. If Bitcoin sustains above the $71,500 to $72,000 bracket, Ethereum could aim for a new high at $4,090. A consistent closure above this figure would indicate strong market confidence in achieving new peaks. On the contrary, if Ethereum’s price slips below $3,830, it may tumble towards the $3,500 support level.
Understanding Ethereum’s Ownership and Decentralization
The Ethereum network operates as a decentralized entity, with the Ethereum Foundation contributing to its open-source development. While Vitalik Buterin is a well-known co-founder, he does not ‘own’ Ethereum. The network’s decentralization signifies that it lacks a singular owner, and its continuity is ensured by the operation of individual stake nodes.
Ethereum Classic Faces Market Instability
Ethereum Classic’s price stands at $36.2, with observable sell-offs influenced by Bitcoin’s price fluctuations. A continued decrease in Bitcoin’s price could push Ethereum Classic down towards a $26 support level, and in the scenario of a severe market downturn, a drop to $18.5 is conceivable.