Ethereum: Significant Update is Coming on August 5
What will happen?
On August 5, Ethereum, the second-largest cryptocurrency under Bitcoin, will undergo a major update. The update named London includes a cryptocurrency Improvement Proposal (EIP 1559). The main goal of this update is an improvement of transaction fees. Currently, users bid an amount of money they are ready to pay for transactions. It makes procedure costs extremely high. According to the information about an update, from now on, an automated system will calculate fees by itself according to the system’s workload. It will reduce costs for Ethereum users and make this payment method more affordable.
Another influential change under EIP-1559 is that part of every transaction fee will be burned, or removed from circulation, which will begin to reduce the supply of ether and potentially boost its price.
What does it mean for the Ethereum community?
After this update, Ethereum will become a more popular method of making transactions between users as high commissions are the main problem that makes the crypto community prefer using BTC to ETH as a payment method.
Moreover, after an update, Ethereum will be the deflationary asset as burning Ethereum fees after transactions will lead to the supply reduction.
These facts will make Ethereum a perfect haven asset, which will be extremely popular during the upcoming rise of US inflation.
Technical analyses
ETH/USD 4H Chart
On the 4H chart, Ethereum broke through an extremely important support level at $2640. Moreover, the divergence with the RSI oscillator appeared, this is the sign of an upcoming correction. The main targets for this movement are $2640 and $2390. If the price holds above $2390, we will see a massive pump with a target of $2850.
At the same time, the rising wedge figure appeared on the BTC dominance chart. It is the bearish pattern with the main target at 40%. The meaning is calculated as the ratio of bitcoin capitalization to the capitalization of other cryptocurrencies expressed in percentage. This is a signal for the beginning of “altcoin season”, the time when all cryptocurrencies except Bitcoin are getting pumped.
Daly Bitcoin dominance chart. Source: tradingview.com
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