Ethereum news: Does a system simplification strengthen the trust of investors?
- Vitalik Buterin proposes Beam Chain and RISC-V to reduce the complexity of the Ethereum system protocol.
- Despite ETF inflows and positive signals, ETH fights under $ 2,000 before the Pectra upgrade on May 7th.
Ethereum is traded near $ 1,800 because investors are waiting for the Pectra upgrade on May 7th and Vitalik Buterins evaluate proposed protocol changes.
Buterin has proposed to replace the Beacon Chain with Beam Chain and switch the EVM to RISC-V to reduce complexity.
Redesign should reduce complexity
In a recently published Blog post He wrote that the complexity of Ethereum leads to security and cost problems in the long term. He says the Bitcoin protocol is much easier:
“Every clever high school student could understand it, and hobby programmers could easily create clients.”
This is not the case with Ethereum’s execution layer, which the Ethereum Virtual Machine (EVM) uses. According to the butterin, this is because she is still optimized for outdated cryptographic operations. He wants to change that. He suggests taking over the RISC-V architecture, which could make the execution up to 100 times more efficient.
That would have some problems with the downward compatibility, but he has a gradual approach in mind to migrate the consensus to a native RISC V environment. He also suggests replacing the Beacon Chain with the Beam Chain to simplify the peer-to-peer infrastructure.
In this way, Ethereum, in his opinion, could reduce the development costs, minimize the risk of errors and achieve a stronger participation of the community in protocol development. He believes that this could happen with some coordinated upgrades within five years.
Technical charts show uncertainty – ETH tests support zones
According to Buterin’s blog post, the price of Ethereum fell 1 % and is currently traded at $ 1,803.51. ETH has not managed to rise over the 9-week exponential moving average (EMA) since January. Ethereum printed a Doji candle last week, which reflects the uncertainty between buyers and sellers. A rejection of the EMA level indicates a declining upward moment.
According to the youngest CNF-Analyse ETH shows a tight Bollinger band squeeze at the ETH/BTC couple, which was last observed in June 2020. Such a squeeze usually precedes a volatility outbreak.
On the downward side, support levels must be observed at $ 1,785, $ 1,750 and $ 1,685. The resistance is $ 1,830 and $ 1,880, a further increase is limited at $ 1,920. The technical indicators show the MACD on the daily chart in the declining area and the RSI under the 50 mark, which indicates continuing pressure.
The ETH liquidations of the last 24 hours amounted to $ 44.45 million, with $ 35.71 million in long positions. The futures data of Coinglass show the continued restraint of the dealers. The current range between $ 1,749 and $ 1,855 indicates a low pressure to buy.
Institutional demand speaks for a positive outlook
Sea Socal recorded US spot ETFs for Ethereum last week net inflows of $ 106.75 million. This is the second week in a row with positive tributaries and reflects the traditional interest of investors despite the recent price stagnation.
As CNF reported, the historical performance speaks for a bullish May. Since 2016, ETH has increased an average of 27.36 % in May, and 24.65 % last year. Technical analysts indicate that the relative strength index (RSI) has once again tested a multi-level level of support, a pattern that preceded earlier relaxation.
In the meantime, Ethereum continues to act under his on-chain Realized Price of $ 1,972. This level, as from Glass node defined, the average cost basis for ETH represents in circulation. Remaining under this brand signals a weak upward dynamics and underlines the bearish mood.
The Pectra upgrade, which is planned for May 7th, aims to increase the ETH operating limits from 32 to 2,048 per validator. In addition, the number of “Blob” data units per block is increased and the transition to the EVM object format (EOF) is carried out. These changes aim at improved scalability, lower Layer 2 costs and improved Smart Contract efficiency.
Despite these upgrades and institutional interest, Ethereum has not yet recaptured the psychological brand of $ 2,000. An outbreak of $ 1,880 could trigger a movement towards $ 2,050. Until then, the market remains careful in the run-up to the Pectra introduction.
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