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Despite the rise of Bitcoin from $45,000 to $52,000, Ethereum has attracted attention for its relative stability. Many people consider this price behavior as a preparatory phase before upcoming developments in Ethereum, anticipating a move to a price level between $3,500 and $4,000 after all processes are complete. These developments are happening just before the critical Dencun upgrade, with investors’ optimism based on the expected upgrade continuing.
Ethereum Layer-2 and Dencun
The upcoming Dencun upgrade planned for ETH in the near future threatens the power gained by Layer-2 (L2) solutions recently, with the upgrade potentially increasing Ethereum’s transaction capacity to 100,000 transactions.
As this scenario unfolds, the value of L2 tokens in relation to Ethereum is increasingly questioned as the Dencun upgrade approaches.
As of today, networks such as Arbitrum, Optimism, and various other L2 networks play a significant role in Ethereum’s scalability. The upcoming Dencun upgrade could reverse this entire process and suddenly impact the utility and value of L2 tokens.
Ethereum Holdings Increase
Recent ETH accumulation transactions by a whale, coinciding with the price increase, suggest that bullish movements in Ethereum could start in the coming days.
The presence of 69,500 ETH worth $179 million at various CEX exchanges at the time of writing indicates a significant increase in demand for Ethereum.
Purchases by whales appear to correlate with a 24% price increase in ETH since the beginning of February. Moreover, looking at the fear and greed index for ETH, market participants seem to lean towards a more positive outlook.
Ethereum’s Place in the Crypto World
Although L2 solutions appear to be in competition with each other, Ethereum’s native token ETH has stood out with strong performance, except for ImmutableX, which has positioned itself as a company focused on blockchain games and exceeding expectations.
The potential announcement of a spot Ethereum Exchange-Traded Fund (ETF) expected to be approved soon seems to be creating a positive sentiment for L2 Ethereum.
The Dencun upgrade, which is expected to occur shortly, appears to be a historic turning point for the ETH ecosystem.
If Ethereum’s scalability reaches the desired level and transaction volumes after this development, the need for L2 solutions could see a significant decrease. Nevertheless, when looking at the long-term outlook of the existing L2 networks, the value of their assets should not be limited to scalability improvements alone.
