• Ethereum co-founder shared major possible upgrades post-Merge.
• Despite ETH’s recovery, the threat of a decline remains.

As the markets kick off positively this week, Ethereum [ETH] co-founder Vitalik Buterin shared insights into potential enhancements for the Proof-of-Stake (PoS) system.

He reflected on what can still be improved following the blockchain’s pivotal transition in “The Merge.” 

In a recent post, Buterin highlighted key proposals, including single-slot finality for faster block confirmations, staking democratization by reducing entry barriers, and single secret leader election to enhance security by concealing block proposers until publication. 

These changes aim to boost efficiency, accessibility, and protection against censorship or attacks.

ETH’s market state

This new proposal, along with Monochrome Asset Management’s plans to launch Australia’s first spot Ethereum exchange-traded fund (ETF), had a positive impact on the price.

At press time. ETH was trading at $2,520, marking an appreciation of 2.37% over the last 24 hours.

In addition, the Moving Average Convergence divergence (MACD) formed a bullish crossover, further validating the renewed bullish momentum.

While the price has flipped the 20-day EMA, it is yet to make a definitive move over the 50-day EMA. 

Reclaiming this would allow the bulls to extend the rally toward $2,700. Moreover, to reverse the longer bearish trend, ETH bulls would need to breach the 200-day EMA resistance of around $2,800.

What do the metrics say?

Like the price, Ethereum’s market dynamics also revealed intriguing signs of a shift. Substantially more short liquidations than long suggested that bears were being forced out of their positions, leading to a short squeeze. 

The positive funding rate, as per CryptoQuant, reinforced this bullish bias. Moreover, the Weighted Sentiment of 0.131 reflected a moderately positive outlook among investors, hinting at rising confidence. 

Is the bullish rally under threat?

Despite the recent recovery, AMBCrypto’s analysis of the Coinglass liquidation heatmap warranted caution.

Over the past week, a strong liquidity cluster formed around $2,400. This magnetic zone might attract the price toward it. This level can act as crucial support in case of any pullbacks.

While the possibility of a short squeeze remains, a break below $2,400 could trigger long liquidations and reverse the trend.