With a positive start to the week in the markets, insights were shared by Vitalik Buterin, the co-founder of Ethereum [ETH], regarding potential upgrades to the Proof-of-Stake (PoS) system.
Reflecting on areas that still have room for improvement post the blockchain’s crucial transition during “The Merge,” Buterin highlighted key proposals in a recent communication.
These proposals include the implementation of single-slot finality to expedite block confirmations, democratization of staking by decreasing entry barriers, and the introduction of a single secret leader election to enhance security and anonymity during block proposing.
These suggested changes are geared towards enhancing efficiency, accessibility, and overall protection against censorship and potential attacks.
The Current State of ETH in the Market
This new proposition, combined with plans by Monochrome Asset Management to introduce Australia’s first spot Ethereum exchange-traded fund (ETF), has had a positive impact on the price of ETH.
As of the moment, ETH is being traded at $2,520, reflecting a 2.37% increase over the last 24 hours.
Furthermore, a bullish crossover has been identified by the Moving Average Convergence Divergence (MACD), which further confirms the resurgence of bullish momentum.
Although the price has crossed over the 20-day Exponential Moving Average (EMA), it is yet to decisively surpass the 50-day EMA.
Securing this breakthrough would enable the bulls to extend the upward trend towards $2,700. Additionally, in order to reverse the prolonged bearish trend, ETH bulls would need to surpass the resistance of the 200-day EMA at approximately $2,800.
Insights from Market Metrics
Much like the price, Ethereum’s market dynamics have also shown interesting indications of a potential shift. A significantly higher number of short liquidations compared to long liquidations suggest that bears are being pressured to exit their positions, leading to a potential short squeeze.
The positive funding rate, as reported by CryptoQuant, further strengthens this bullish sentiment. Additionally, the weighted sentiment of 0.131 reflects a moderately optimistic outlook among investors, indicating a growing confidence in the market.
Is the Bullish Trend at Risk?
Despite the recent recovery, caution is advised as CryptoCrypto’s analysis of the Coinglass liquidation heatmap indicates potential risks.
Over the previous week, a significant liquidity cluster emerged around $2,400, acting as a magnetic zone that could pull the price towards it. This level could serve as critical support in the event of any pullbacks.
While the possibility of a short squeeze lingers, a drop below $2,400 might trigger long liquidations and reverse the prevailing trend.