Ethereum price eyes rally to $3,000 with upcoming Dencun testnet, ETH network upgrade could catalyze gains

The Ethereum Dencun network upgrade will be activated on the Goerli testnet on January 17.
Dencun is known for the introduction of data blobs with the EIP-4844 or the protodanksharding upgrade to the Ethereum chain.
Ethereum price rallied past $2,600 on January 10, the $3,000 level is the next psychologically important target.

Ethereum (ETH) developers said on Thursday that its Dencun upgrade, also called protodanksharding upgrade or EIP-4844, will be activated on the Goerli testnet on January 17. EIPs (Ethereum Improvement Proposals) implement upgrades on the existing chain, and the upcoming one is expected to reduce the Layer 2 transaction fees through the introduction of “data blobs.”

Also read: Bitcoin Spot ETF approvals ushers in fee wars among key players, BTC price gains likely capped

Ethereum Dencun upgrade: When and why it could catalyze ETH gains

Tim Beiko, developer at the Ethereum Foundation announced in its X account that the Dencun upgrade will be activated on the Goerli testnet on January 17. This is an important upgrade to the Ethereum chain, considered one of the most important ones since the Merge.

Blobs are coming to Goerli .oO

On Jan 17, at 6:32 UTC, Dencun will activate on the testnet! It will be the last network upgrade before Goerli shuts down in a few months.

More info on the upgrade, client releases, and more, in the full announcement https://t.co/WJ7GYT6Sbk
— timbeiko.eth ☀️ (@TimBeiko) January 11, 2024

Ethereum Layer 2 transaction cost is likely to be lowered with the upgrade. This will be possible through the use of “data blobs.” A blob is a large piece of data that can be attached to Ethereum blocks and rollups, a type of Layer 2 scaling solution that can use blobs to store transaction data and free up space on the base chain.

The implementation of EIP-4844 in the Dencun upgrade is expected to free up space on the Ethereum chain and allow rollups to process at low transaction cost, developers said.

Ethereum price eyes rally to $3,000

Ethereum price is currently in an uptrend. ETH rallied to $2,500 on Wednesdsay, after the SEC’s approval of the Spot Bitcoin ETF. Experts said that capital rotation from Bitcoin to Ethereum fueled the altcoin’s gains.

ETH price is currently above its 50-day and 200-day Exponential Moving Averages (EMAs) at $2,231 and $1,959, respectively. The next target for ETH in its uptrend is the 78.6% Fibonacci retracement level at $3,004 from the June 2022 peak to April 2022 low.

Ethereum

ETH/USDT 1-day chart

A daily candlestick close below the 50% Fibonacci retracement level at $2,232 could invalidate the bullish thesis for ETH price.

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