Ether Reclaims $2,000 Support Amid Upcoming Pectra Upgrade
On March 24, Ether (ETH) managed to reclaim the $2,000 support level, although it remains 18% below the $2,500 mark seen three weeks prior. Recent data indicates that Ether has underperformed the altcoin market by 14% over the last month, prompting traders to speculate on its ability to regain bullish momentum. The Ethereum ecosystem has faced criticism for lagging behind competitors in user experience and scalability, which has negatively impacted network fees and transaction efficiency. The upcoming Pectra network upgrade, scheduled for late April or early June, aims to address many of these challenges by doubling the data capacity of each block and introducing smart accounts that enhance transaction functionalities.
The Pectra upgrade is expected to bring significant improvements, including reduced fees for rollups and privacy mechanisms, as well as increased flexibility for staking deposits and withdrawals. Arthur Hayes, co-founder of BitMEX, recently set a price target of $5,000 for ETH, asserting that it should outperform Solana (SOL). However, the sentiment among ETH options traders appears less optimistic, as indicated by the low cost of call options with high strike prices. Despite this, Ethereum continues to lead in smart contract deposits and is the only altcoin with a spot exchange-traded fund (ETF) in the US, currently managing $8.9 billion in assets.
Ethereum’s total value locked (TVL) stands at $52.5 billion, significantly higher than Solana’s $7 billion, with a 10% increase in deposits over the past month. The Ether supply on exchanges has also decreased, suggesting a long-term commitment from investors. Additionally, the Ethereum network is gaining traction in the Real World Asset (RWA) sector, further solidifying its dominance in decentralized finance (DeFi). Although Ether’s price dipped below $1,900 earlier this month, the recent trends indicate a potential rally towards the $2,500 mark as traders continue to withdraw from exchanges, reflecting a more bullish outlook for the asset.
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