Ethereum could be set for growth as Vitalik Butein shares update on its future
|- Ethereum wants to achieve real-time proof through advanced cryptography.
- FTX/Alameda has deposited 4,000 ETH into Coinbase.
- ETF analyst James Seyffart confirmed that Defiance Investment has applied for a 2x leveraged Ethereum futures ETF.
Ethereum broke out of a one-week consolidation streak on Monday when it outperformed Bitcoin (BTC) to reach $3,730. The price increase highlights rising social media activity for Ethereum following Vitalik Buterin's speech at Tuesday's Hong Kong Web3 carnival.
Read more: Ethereum's price recovery looks imminent as ETF approval sees a glimmer hope
Daily digest market movers: Vitalik's speech, FTX ETH deposit, Defiance futures ETF
Ethereum has been showing high social media activity since Monday, according to data from LunarCrush. Here are some of the market movers causing increased attention for the largest altcoin:
- In a speech titled "Reaching the Limits of Protocol Design" at Tuesday's 2024 Hong Kong Web3 carnival, Ethereum co-founder Vitalik Buterin drew a contrast between protocols of the 2010s and 2020s. He stated that while protocols of the 2010s were mainly based on basic cryptography, protocols in the 2020s need to be based on advanced cryptography, such as ZK-SNARKs, MPC, FHE, 2PC or Aggregation.
However, he also noted the efficiency and security issues in these advanced cryptographic solutions and how they slow block verification and proof time. He further went on to clarify that Ethereum aims to achieve real-time proof and suggested "parallelization and aggregation trees" as a potential solution. Vitalik also presented an Ethereum ecosystem diagram that sparked debate in the crypto community. The diagram featured projects like Arbitrum (ARB), Optimism (OP) ecosystem, Starknet ecosystem, zkSync, Metis, Linea, Scroll, Fuel and Polygon (MATIC), excluding Layer 2s that do not use Ethereum as their data availability layer.
- According to Spot On Chain, defunct exchange FTX and its sister firm, Alameda Research, deposited 4,000 ETH worth $14.75 million to Coinbase on Monday. The duo has been depositing ETH on Coinbase since the market rally on February 1, and its recent deposit brings the total to 21,650 ETH—approximately $72.4 million.
- This comes at a time when Defiance ETFs have filed for a 2x leveraged Ethereum futures ETF, as confirmed by Bloomberg analyst James Seyffart in an X post on Monday. If approved, the leveraged ETH futures ETF could go live around late June, trading under the ticker ETHL. The recent filing contrasts Defiance's earlier application for 2x Short MSTR ETF, tracking 2x the daily inverse performance of MicroStrategy incorporated stock. The move appears complex as Bitcoin's price movement has heavily influenced MicroStrategy's stock and ETH price in the past few years.
Also read: Ethereum on course to post weekly losses as debate over security status continues
Technical analysis: Ethereum bulls may not sustain buying pressure
Ethereum's price has seen a correction in the past 24 hours after reaching a three-week high of $3,730 on Monday. Its recent price increase indicates a short-term excitement among long traders. However, liquidation data from Coinglass on Tuesday shows bears are beginning to have their way, with ETH seeing the largest liquidation of more than $69.5 million. Liquidated long positions account for $48.9 million.
The largest single liquidation order occurred in an ETH-USD-SWAP worth $7.5 million. ETH is trading at $3,515, down 3.5% on the day. It has broken previous support levels of $3,570 and $3,517 and tested the next support of $3,479. This move is to fill the liquidity void posted on Monday.
Read more: Ethereum continues consolidating as Q1 results show massive growth for the largest altcoin
ETH/USDT 4-hour chart
If bulls show weak hands, ETH could decline further, especially as Bitcoin trades in the red on Tuesday.
Ethereum development FAQs
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
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