Key Notes
- Vitalik Buterin has introduced a three-stage security model for Ethereum rollups.
- Critical support at $1,770 is under threat, while bullish targets range from $1,931 to $2,172.
- ETH remains bearish with MACD remaining bearish and RSI hovering near oversold territory.
Ethereum co-founder Vitalik Buterin laid out a critical roadmap for Layer 2 rollup security, emphasizing a gradual shift toward trustless systems.
Vitalik’s new proposal categorizes Ethereum rollups into three security stages:
- Stage 0: Full control by a security council. Proof systems exist but are advisory.
- Stage 1: Council can only override the system with a 6-of-8 supermajority, with at least 3 members outside the core team.
- Stage 2: The council acts only in cases of provable bugs and has no discretionary control.
His mathematical modeling, based on the probability of a security council member “breaking” (10%), finds that Stage 0 rollups are significantly more vulnerable, with a failure probability of 0.2728%.
The data advocates for at least Stage 1 deployment, especially as proof systems mature. Still, Buterin warns against prematurely shifting to Stage 2 if it detracts from strengthening the underlying cryptographic mechanisms.
Technical Analysis: ETH Faces Bearish Pressure
While Ethereum’s fundamentals look promising in the long term, the technicals on the 4-hour chart are currently less bullish.
The MACD (Moving Average Convergence Divergence) indicator shows that the MACD line is at -3.92 and below the signal line (-1.94), showing bearish momentum. Meanwhile, histogram bars are negative, confirming selling pressure.
The Relative Strength Index (RSI) is at 39.26, indicating bearish territory and potential for further downside before oversold conditions are reached. The indicator has been trending downward, suggesting weakening buyer interest.
ETH Daily Chart with RSI and MACD | Source: TradingView
With the current price at $1,782, the immediate support lies near $1,770 (below current price), with a key Fib level at 0.786 ($1,784.84) just being broken.
If ETH manages to reclaim and hold above $1,785, potential upside targets include 1.618 Fib extension: $1,931, 2.618 Fib extension: $2,023, 3.618 Fib extension: $2,115, and 4.236 Fib extension: $2,172.
A push beyond $1,931 would likely require a shift in momentum confirmed by an RSI cross over 50 and a MACD bullish crossover.
Simplification of the L1
In another blog post earlier this month, Buterin argued for a shift towards a more “minimal base protocol” over the next five years, drawing parallels with Bitcoin and its renowned simplicity.
The entrepreneur expressed concerns over the increasing complexity of Ethereum, suggesting that some sophisticated features, while innovative, have not delivered substantial practical benefits in retrospect.
Buterin proposed a “3-slot finality” model aimed at streamlining the consensus mechanism by eliminating components such as sync committees and epoch structures. He also emphasized the need for greater standardization across the protocol to alleviate toolchain.
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