Ethereum is reaching new heights along with other cryptocurrencies, pulling the entire market in an upward swing. According to Coingecko, the market itself grew over a percent in the past 24 hours. The prime altcoin itself is up 5.5% since last week.
This sudden swing in price can be attributed to recent on-chain and macro developments that emboldened the bulls in the broader financial market.
Ethereum followed the stock market higher as US politicians broke their impasse over the federal government’s debt ceiling.
United States President Joe Biden and Republican Congressman Kevin McCarthy reached a tentative deal to suspend the $31.4 trillion debt of the US government. This came after a few months of tense back and forth deliberations between the Democrats and Republicans.
US Debt Deal: A Quick Look
A US debt deal refers to an agreement reached by the United States government to address its national debt and borrowing limits. These deals typically involve negotiations between political parties to determine the government’s spending levels and borrowing capacity.
The specific impact on cryptocurrencies can depend on several factors: Investor sentiment, inflation concerns, regulatory environment, and market volatility, among others.
The next step is for Congress to vote on the agreement, which will prevent a debt default by the United States government if it passes.
What’s In Store For Ethereum?
Meanwhile, according to Cryptoquant data, Ethereum’s balance on centralized exchanges continues to fall, signifying that investors and traders are more likely to hold their ETH than position them to sell.
The coin’s current level is known to be the lowest in the past five years as staking withdrawals on the Ethereum network were introduced in the Shanghai upgrade.
The Cancun-Deneb (Dencun) upgrade will also be implemented later this year. This next planned upgrade for the Ethereum blockchain will improve on various aspects of the blockchain like scalability and security.
What’s Next For #Ethereum?
Cancun-Deneb (Dencun) Upgrade:
EIP-4844, also referred to as “proto-danksharding,” is a significant enhancement to improve the scalability of Ethereum. It is expected to be integrated into the Dencun upgrade in the later part of Q3 or early Q4 of…
— Wheatstones (@wheatstones_) May 26, 2023
The most exciting portion of the planned upgrade is the introduction of Danksharding, a technique to increase data availability on-chain.
This will allow Layer 2 rollup technology to be more efficient and optimized as the simplified sharding architecture contributes to the L2s’ growth.
EIP-4844 or proto-danksharding will introduce ephemeral data storage or storage blobs.
These storage blobs will allow rollups to settle transactions and post data on the base layer w/o competing with other #Ethereum transactions, potentially making rollups 10-100x cheaper. pic.twitter.com/F7PBGgGVQY
— Messari (@MessariCrypto) May 28, 2023
With the backing of this planned upgrade, investors and traders can be confident of a bullish momentum to form in the long term.
Bulls should then focus on the macro developments that define the broader financial market. With the recent deal concerning the US debt crisis, the market has grown bullish with major indices like the Dow Jones Index and S&P 500 expected to gain ground in the short term.
Along with the probability of a dovish Federal Reserve report in June, we might see more gains in the coming weeks and months.
At $1,902, Investors Should Watch This Level
Ethereum is currently hovering above the $1.8k support level which should be able to hold if the bears come sliding.
At the moment, ETH’s momentum puts it on path towards surpassing $2k in the medium to long term. Investors and traders should also be able to target $2.5k comfortably once the $2k level is taken.
However, ETH bulls should still exercise caution. If the market continues to correct, Ethereum might return to $1.7k if they gain ground.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
-Featured image from The Merkle News