Tim Beiko announced Shapella upgrade

Tim Beiko, a key developer for Ethereum, has revealed that the next planned update for Shapella would take place on February 28. When epoch 56832 arrives, the Shapella network update will become operational on the Sepolia network.

The names Shanghai and Capella (Shapella) are now being considered for the forthcoming Ethereum hard split. On the execution layer client side, the fork is referred to by the name Shanghai, whereas on the consensus layer client side, the upgrade is referred to by the name Capella.

On the execution layer, some major Ethereum improvement proposal (EIP) enhancements include push withdrawals on the Beacon Chain and warm coinbase. Warm coinbase should not be confused with the cryptocurrency exchange. By using a new “system-level” operation type, the push withdrawals will make it possible for validators to withdraw funds from the Beacon Chain and send them to the Ethereum Virtual Machine. Warm Coinbase, on the other hand, has the potential to be a game-changer by lowering the network costs that builders must pay.

The piece of software known as Coinbase is what builders on the network use to be credited with newly issued coins. Each and every new transaction on the network is required to have many interactions with the Coinbase program. Because the program takes more time to “warm up,” the charge for the first engagement is higher than the fee for subsequent interactions, which decrease as the number of contacts increases. However, with the implementation of EIP-3651, the coinbase software will stay warm from the start, and users will be required to pay a lesser gas charge in order to access it.

The initial unique historical roots have been replaced by complete and partial withdrawals for validators, as well as independent state and block historical accumulators. These are some of the major modifications that have been made to the consensus layer.

The ability to make a partial withdrawal enables validators to continue verifying transactions while withdrawing ether (ETH) rewards in amounts greater than 32 ether. Validators have the option to entirely abandon the system, collect all 32 Ether and awards, and call it quits if they wish to make a full withdrawal.

The next update will provide validators the ability to transfer their staked Ether (stETH) from the Beacon Chain to the execution layer so that they may spend it. In addition, the update would bring about modifications to the execution and consensus layers, as well as the addition of new functionality; hence, it would be an essential upgrade after the Merge.

In order to take advantage of the Sepolia update, however, stakers and non-stakers who run nodes are need to bring their nodes up to date with the most current versions of the Ethereum client. The next phase would be the release of the Shanghai upgrade on the Ethereum Goerli test network, which is anticipated to begin in the month of March. This would be the following step after the deployment of the Sepolia upgrade.


Tagged : / / / / / / /

Crypto derivatives data signals improving investor sentiment and a possible trend reversal

This week the total crypto market capitalization rallied 10% to $1.68 trillion, which is a 25% recovery from the Jan. 24 bottom. It’s too early to suggest that the market has found a bottom but two key indicators — The Tether/CNY premium and CME futures basis — have recently flipped bullish, signaling that positive investor sentiment is backing the current price recovery.

Total crypto market cap excluding stablecoins, in USD billion. Source: TradingView

Traders should not assume that the bear trend has ended by merely looking at price charts. For example, between Dec. 13 and Dec. 27, the sector’s total market capitalization bounced from a $1.9 trillion low to $2.33 trillion. Yet, the 22.9% recovery was completely erased within nine days as crypto markets tanked on Jan. 5.

Bearish data suggests the Fed has less room for rate hikes

Even with the current trend change, bears have reason to believe that the 3-month long descending channel formation has not been broken. For example, the Feb.4 rally could have reflected the recent negative macroeconomic data, including EuroZone retail sales 2% yearly growth in December, which was well below the 5.1% market expectation.

Independent market analyst Lyn Alden recently suggested that the United States Federal Reserve could postpone interest rate hikes after disappointing U.S. employment data was released on Feb. 2. The ADP Research Institute also showed a contraction of 301,000 private-sector jobs in December, which is the worst figure since March 2020.

Regardless of the reason for Bitcoin (BTC) and Ether (ETH) gaining 10% on Friday, the Tether (USDT) premium at OKX reached its highest level in four months. The indicator compares China-based peer-to-peer (P2P) trades and the official U.S. dollar currency.

Peer-to-peer CNY/USDT vs. CNY/USD. Source: OKX

Excessive cryptocurrency demand tends to pressure the indicator above fair value, or 100%. On the other hand, bearish markets tend to flood Tether’s market, causing a 4% or higher discount. Therefore, Friday’s pump had a significant impact on China-driven crypto markets.

CME futures traders are no longer bearish

To further prove that the crypto market structure has improved, traders should analyze the CME’s Bitcoin futures contracts premium. The metric compares longer-term futures contracts and the traditional spot market price.

It is an alarming red flag whenever that indicator fades or turns negative (backwardation) because it indicates that bearish sentiment is present.

These fixed-calendar contracts usually trade at a slight premium, indicating that sellers are requesting more money to withhold settlement for longer. As a result, the 1-month futures should trade at a 0.5% to 1% annualized premium in healthy markets, a situation known as contango.

BTC CME 1-month forward contract premium vs. Coinbase/USD. Source: TradingView

The chart above shows how the indicator entered backwardation levels on Jan. 4 as Bitcoin moved below $46,000 and Friday’s move marks the first sentiment trend reversal in a month.

Data shows that institutional traders remain below the “neutral” threshold as measured by the futures’ basis, but at least reject the bearish market structure formation.

While the CNY/Tether premium might have shown a trend shift, the CME premium reminds us that there’s a lot of distrust in Bitcoin’s capacity to function as an inflationary hedge. Still, the lack of CME traders’ excitement could be exactly what BTC needs to further fuel the rally if the $42,000 resistance is broken over the weekend.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.