Possible effect of Ethereum’s Dencun Upgrade on Layer-2 tokens

Ethereum’s Dencun upgrade is slated to go live in the middle of March 2024. All eyes are on its Dencun Upgrade, which commits to bringing economic cost and efficiency transactions to the native network. Also, there are speculations that layer-2 tokens could get a potential boost from Dencun Upgrade.

More specifically, it is EIP-4844 which can boost L2 tokens. It basically introduces blobs to the Ethereum mainnet. The major task is to make networks fast and economical. ETH is an ideal contestant that is likely to get a major boost. Ether is currently listed at $3,960.55, with a surge of 4.67% in the last 7 days.

Other tokens are also poised to gain momentum, like Ether, because Dencun Upgrade will position other networks to be more efficient. This increases activity on networks, which will later be transitioned to a higher demand for the native assets. Some tokens likely to experience the boost are ARB, MATIC, IMX, STRK, and MNT.

Arbtirum’s ARB has been down by 7.09% in the last 24 hours and is listed at $2.04. It has also slipped by 1.81% in the last 7 days and 1.49% in the last 30 days. Polygon’s MATIC has found a way to sustain the margin. It is almost steady, with a slight drop of 0.495 in the previous 24 hours, exchanging hands at $1.23. Other tokens are dancing to the same tunes and will likely pick up momentum by the end of March.

That is a phase when speculation around Bitcoin Halving will start gaining strength. That will specifically drive the price for BTC, but the crypto market at a macro level will experience soaring values.

Community members believe it will be ideal to focus on profit instead of waiting for more accumulation. This comes after the possibility that many will dump their holdings after Bitcoin Halving. The prices will be higher, and profit-taking could be a trend. If that happens, the selling pressure will hit the upward trajectory for a price pull.

While writing this article, Bitcoin has retraced to $72,892.69, with a fall of 0.58% in the last 24 hours. It was rallying above $73,000 with analysts defining $50,000 as the new floor for Bitcoin. That is the lowest the token will hit unless something dramatic happens in the market or elsewhere.

Simply put, Dencun Upgrade by Ethereum is coming with a strong possibility to spark bullish sentiments among ETH holders. There is a possibility that other L2 tokens may simultaneously witness a similar trend when EIP-4844 shows its effects on efficiency and economic cost.

Traders are recommended to research before diverting funds to any crypto asset, for the market is highly volatile.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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