The Ethereum Dencun Upgrade is set to be the next huge sentiment that will drive volume into ETH as the price is predicted to go up further in the long run.
However, looking at previous huge upgrades, there are speculations that ETH might go into a price correction after the upgrade happened triggering a “buy the rumor, sell the new” move which might happen considering ETH has been going up lately.
Ethereum Dencun Upgrade Date
The Ethereum Dencun Upgrade is set to happen at slot 8,626,176 of the Ethereum Blockchain, which is predicted to happen around March 13th, 2024.
Ethereum Foundation is confident that the timeline will not change, as they have already set up a livestream on Youtube for people to watch the upgrade happen live.
Currently the Dencun upgrade is being tested intensely in both the Sepoila Testnet and the Holesky Testnet.
Ethereum Foundation has successfully launched the upgrade on Sepoila Testnet on January 31st, 2024, where some nodes and clients have participated to test the upgrade on the testnet.
The upgrade was later launched on the Holesky Testnet on February 7th, 2024 which confirmed that the upgrade is ready to be implemented.
Aside from testing the overall upgrade, the team is currently reminding all the nodes and clients to upgrade to the newest version so they will be able to operate smoothly when the upgrade is implemented.
Hopefully there will be no delays, but looking at the history of upgrades, delays usually occurs, which is why it is good to keep an eye out on Ethereum and ETH itself, especially if you are currently trading it.
Will ETH Go Down?
Looking at the previous huge upgrade of Ethereum, which was The Merge, it can be seen that there is a potential “buy the rumor, sell the news” movement regarding ETH’s price.
The narrative of “buy the rumor, sell the news” is pretty common around financial assets, where the price of an asset increases significantly before a huge news and then drops after the news was announced due to early investors taking profit.
On September 15th, 2022, this was certainly the case where ETH dropped more than 26% in a week after the launch of The Merge.
The price drop occurred after ETH’s astonishing surge of more than 100% in just three months from June 2022 to August 2022.
Arguably, the price correction came because the current state of the market was in the bear market at the time.
Since bear markets usually do not allow most cryptocurrencies to go up, it is reasonable that the upgrade positive news was hindered by the overall market condition.
The price drop from September 15th, 2024 was a continuation of the downward trend from August 2022, after ETH reached more than 100% increase in three months.
Looking at Short and Long Term Possibilities
There are two possibilities predicted after the Dencun Upgrade happens which are a short price increase before correction or an immediate correction for ETH.
Currently the price of ETH is sitting at around $3,700 which might trigger a price increase if ETH has not reached $4,000 yet before the upgrade.
This is because the estimated resistance of ETH’s price is around $4,000 to $4,800 which is the nearest highest price from the previous bull market of 2021.
But, there is also a probability that after the upgrade, ETH will not even touch the $4,000 mark and go straight into a correction to around $3,000 to $2,500, so traders needs to keep an eye out especially if using high leverages.
But looking at the long term trend, it is clear that upgrades pushes ETH higher as evident from the price increase of more than 120% since The Merge upgrade to the current time of writing.
Overall, Trading a news is a risky strategy, so if traders or investors are looking to buy or sell on the Dencun upgrade, it is better to be prepared for volatility by lowering leverages or using limit orders to minimize losses and realize profits automatically according to the initial strategy.
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