Key Notes
- ETH-BTC Bollinger Bands are at their tightest since June 2020, indicating potential volatility.
- Ethereum’s Pectra upgrade on May 7 will raise validator limits and boost data capacity.
- Layer-2s, DeFi, NFTs, and blockchain games are expected to benefit from the upgrade.
As the Ethereum Pectra upgrade nears, crypto traders are keeping a close watch on the ETH-BTC pair, looking to ride the upcoming volatility in the making. As per the Bollinger Band patterns, the trading pair could experience significant volatility moving ahead.
Bollinger Bands are technical indicators that consist of two volatility bands set two standard deviations above and below an asset’s 20-day simple moving average. A Bollinger Band squeeze happens when the bands narrow closely around the price, indicating low volatility and a phase of consolidation.
This shows that the market is preparing for a big move, which could be in either direction, resulting in a major increase in volatility. Currently, the Bollinger Bands on the ETH-BTC chart are at their tightest levels since June 2020.
The squeeze suggests that Ether may soon see heightened volatility against Bitcoin. Traders closely monitor the price action to determine the breakout direction, as significant moves often align with the breakout’s trajectory.
ETH/BTC Bollinger Bands. Source: Trading View
All Eyes Are on Ethereum Pectra Upgrade
The upcoming Ethereum Pectra upgrade will enhance network scalability, raise validator staking limits, and improve overall blockchain efficiency.
Scheduled for May 7, the Ethereum Pectra upgrade will significantly raise the maximum staking limit for validators from 32 ETH to 2,048 ETH. It will also increase the number of “blob” data units per block from 3 to 6, with a maximum capacity of 9 blobs.
The upgrade will begin the transition to the EVM Object Format (EOF), a new framework designed to enhance smart contract performance and efficiency. According to blockchain analytics firm Nansen, these improvements mark a key step in Ethereum’s ongoing development.
“Layer-2 networks stand to benefit the most. By doubling blob capacity and making call data more expensive, Pectra solidifies blobs as the standard for rollup data posting. This reinforces Ethereum’s role as a data availability layer and strengthens its rollup-centric scaling strategy.”
The firm also stated that DeFi could also gain momentum while noting that NFTS and blockchain games would benefit from the overall advancements.
The Ethereum price has remained under strong selling pressure so far, slipping under $1,800 levels, while liquidations hit $67 million last week.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
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