Ethereum: Shanghai - another major update and impact on ETH
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According to data from Santiment, both ETH exchange inflows and outflows are decreasing. This is a symptom of the sluggish behavior of internal and off-chain wallet owners.
On the other hand, the Ethereum development team moved quickly to initiate the Shanghai upgrade, the next phase of Ethereum consolidation.
Shanghai upgrade is coming
The core Ethereum development team is starting work in Shanghai on the next major upgrade to the Ethereum network.
So a testnet, called Shandong, was created to get things up and running. Multiple Ethereum Improvement Proposals (EIPs) will be deployed to Shandong for testing before being rolled out by the Ethereum core developers to a series of smaller changes to include in Shanghai once it goes live.
With Consolidation being the first of a five-stage upgrade, Surge will see the introduction of sharding on Ethereum.
Sharding is an important step in improving the scalability of blockchain data storage and retrieval mechanisms. Ethereum will use sharding along with layer 2 stacks to distribute huge data sets across the network.
Following the consolidation, the next three phases of Ethereum's continued development (Verge, Purge, and Splurge) will take place over the next few years.
Ethereum dominates DeFi
At the time of writing, data from DefiLlama shows that Ethereum has 57% of the total value locked (TVL) across all chains.
As rival smart contract networks emerged, Ethereum's once dominant 90% market share in the nascent decentralized financial technology (DeFi) industry has eroded.
With these planned changes and the potential recovery of the crypto market, Ethereum's TVL, in excess of $30 billion, could increase.
The number of active addresses has exceeded two million, based on the 7-day active address index.
ETH price continues to go down
After the rally from around June to mid-August, almost touching the $2000 mark, ETH has been falling recently.
The drop that began in mid-August has continued, according to ETH chart daily timeframe analysis.
At the time of writing, ETH is trading at around $1,300, which is 35% lower than it was before the drop started.
After ETH continued to decline, new support was seen between $1,269 and $1,190. The area between $1,337 and $1,400 is resistance, clearly the previous support.
In addition, the price movement has been noted below the yellow and blue moving averages, which represent the 50 and 200 moving averages, respectively.
ETH will be better
However, the market-to-realization ratio paints a less bleak picture for holders despite the asset's apparent decline.
The 30-day MVRV Ratio shows a reading of -1.49. As a result, buyers and holders have lost less than 2% of the asset's value during the preceding 30 days.
The Ethereum network is expected to improve due to the Shanghai upgrade and subsequent Ethereum upgrades.
While it remains the largest smart contract network in the world, these improvements could allow it to explore new possibilities for blockchain and smart contract applications.
As a result, ETH will have more applications, which may help increase its price.
Oct 20, 2022