Key Points
- Ethereum’s Dencun upgrade went live on March 13, leading to a significant reduction in L2 transaction fees.
- The upgrade has enhanced Ethereum’s scalability and the transaction fees of L2 solution providers have decreased notably.
The Dencun upgrade of Ethereum was successfully implemented on March 13.
This has led to a substantial decrease in transaction fees on leading layer 2 networks (L2s).
Dencun Upgrade and Its Impact
The Dencun hard fork, Ethereum’s largest upgrade since the Merge in September 2022, was activated with the inclusion of EIP-4844.
This upgrade has been designed to improve Ethereum’s scalability and reduce transaction fees for L2 solution providers.
Since the implementation of the Dencun hard fork, L2s such as Optimism, Arbitrum, Base, and zkSync have seen their average transaction fees drop by 92%, 23%, 94%, and 33% respectively.
Ethereum’s Market Performance
At the time of writing, Ethereum was trading at $3,988.
Its positive correlation with Bitcoin, which has increased by over 10% in the past week, has led to a 5% price increase for Ethereum during the same period.
A 2% rise in its supply on cryptocurrency exchanges over the past week suggests an increase in profit-taking activity.
Despite this, market sentiment for Ethereum remains predominantly bullish, as indicated by its Moving Average Convergence Divergence (MACD) indicator.
The MACD line being significantly above the trend and zero lines indicates strong bullish momentum in the market, suggesting potential for continued price growth.
The altcoin’s Chaikin Money Flow (CMF) was 0.26 at the time of writing, indicating high liquidity inflow into the market.
Furthermore, Ethereum’s Relative Strength Index (RSI) and Money Flow (MFI) were 76.57 and 65.54 respectively, indicating that coin accumulation is exceeding sell-offs.
