Ethereum (ETH) Eyes 35% Jump After Network Upgrade News

Ethereum’s native token, Ether (ETH), is preparing to undergo a technical breakout with its latest network improvement proposal further acting as a tailwind to the bullish setup.

Ascending Triangle Breakout Imminent

Ether’s price has recovered by over 9% after falling below $2,400 earlier in October—a drop led by the growing Middle East conflict. Stronger-than-expected U.S. payroll data and China’s stimulus measures have increased the market’s risk appetite, leading to gains across the crypto and stock markets worldwide.

The release of the Federal Reserve minutes from their September meeting on Oct. 9 may offer more insights into the central bank’s interest rate path for the remainder of 2024. Over 97% of bond traders already favor a 25 basis point rate cut in the Fed’s November meeting, a bullish catalyst for Ether.

At the same time, Ether is painting what appears to be a classic bullish reversal pattern, dubbed the ascending triangle. As of Oct. 7, ETH is consolidating just below the $2,630-$2,650 resistance zone, with buyers stepping in at progressively higher levels.

This rising trendline reflects increasing buying pressure, often a precursor to an explosive upward move. Furthermore, a rising daily relative strength index (RSI) in the 30-70 neutral zone improves the upside outlook.

Should ETH break above the key $2,650 resistance, the pattern’s projected upside target would extend toward the $3,390-$3,400 range, measured after adding the maximum distance between the triangle’s upper and lower trendlines to the breakout point.

That’s a 35% jump from current levels.

Conversely, breaking below the lower trendline risks invalidating the bullish outlook, instead exposing the ETH price for a downside move toward its December 2023-Januart 2024 support targets inside the $2,000-2,100 price range.

EIP-7781 Enhances Ethereum’s Bullish Narrative

Ethereum’s fundamentals have just received a major boost with the introduction of EIP-7781, a proposal designed to slash block times and enhance network throughput.

On Oct. 6, Ethereum developer Ben Adams announced the proposal, stating that its successful implementation would reduce block times from 12 seconds to 8 seconds, effectively speeding up transaction confirmations by 33%.

Additionally, the proposal mentions that EIP-7781 would improve data capacity by 50%, allowing Ethereum to handle more transactions and data at a lower cost.

The technical upgrade aligns with Ethereum’s rollup-centric future, where layer-2 scaling solutions take center stage. By improving the latency of rollups and boosting data capacity, the network will likely become better at meeting rising demand, particularly from DeFi protocols, NFTs, and other high-usage applications.

Key Ethereum figures, including Ethereum Foundation researcher Justin Drake, have publicly supported the proposal, highlighting its potential direct impact on the network’s overall efficiency.

Drake noted that reducing block times would make decentralized exchanges like Uniswap 1.22x more efficient, potentially saving $100 million annually in arbitrage costs. These savings translate to better trade execution for users, further incentivizing activity on the Ethereum network.

If all goes well, Ethereum will attract even more users, driving upward pressure on the price of ETH.