Summary: Even if the long-awaited ETH2.0 main network is successfully launched, the price of ETH has dropped significantly with Bitcoin
Summary: Even if the long-awaited ETH2.0 main network is successfully launched, the price of ETH has dropped significantly with Bitcoin.
In the recent pullback, the price of Ethereum's native cryptocurrency, Ethereum (ETH), has fallen more sharply than Bitcoin (BTC).
After reaching a historic high in Coinbase, the price of Bitcoin plummeted by over 9% within a few hours. During the same period, with the market's correction, Ethereum corrected by over 11%.
Due to the launch of Ethereum 2.0 upgraded network, the significant revision of Ethereum is surprising. On December 1st, the ETH2.0 beacon chain was released on the main network, marking an important milestone for Ethereum.
What caused the sharp correction of Ethereum?
ETH2.0 is a key network upgrade for Ethereum blockchain, which can improve its scalability and transaction processing capabilities. Before the upgrade, the network was able to process approximately 15 transactions per second.
After the upgrade, Ethereum will be able to expand to handle thousands of transactions per second, and in the long run, there may be more in the form of sharding.
For Ethereum networks, this is a fundamentally optimistic upgrade as it will allow decentralized applications to run without scalability barriers. It will also make the new decentralized financial cycle more sustainable, thereby improving user experience.
Due to the market's tendency to buy rumors and sell news, it is expected that Ethereum prices will be revised after the ETH2.0 upgrade. For example, when the ETH2.0 upgrade was confirmed in late November, Ethereum prices also fell from around $620.
Nevertheless, Ethereum prices fell by 11% in just two hours, which caught many traders off guard. The importance of upgrading ETH2.0 and its impact may lead to market expectations for Ethereum to have more short-term flexibility.
After the release of the Beacon Chain, industry executives are also very optimistic about the medium to long-term growth trajectory of Ethereum. This may increase the overall positive market sentiment around ETH.
Joseph Lubin, co-founder of Ethereum and founder of ConsenSys, described ETH2.0 and proof of equity as milestone upgrades. He said:
The release of the ETH2.0 beacon chain is a characteristic of the emerging open source spirit, which first attracted so many people to Ethereum. Now, more than 27000 validators from around the world are participating in the new ETH2.0 consensus model. Proof of Rights is a major upgrade to the crypto economy incentives, which have made Ethereum an automated and objective foundation of trust. We are working together to deepen our commitment to building a maximum The promise of a centralized network
What will Ethereum do next?
Traders expect a greater pullback in the near future, or at least a period of consolidation. When Bitcoin suddenly fell, the futures market was greatly hit, causing chaos in the entire derivatives market.
An anonymous trader named "TraderKoz" stated that once Ethereum consolidates above $620 again, it will become attractive. If the pullback continues, the $561 level will remain a key support level for Ethereum in the short term. The trader said:
Ethereum's opening price on Monday was good. If Ethereum were to consolidate within a moderate range for a period of time, we wouldn't be surprised. Once Ethereum's price rises by more than $620, I would be interested in more long positions
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