A new week has begun, today is Monday, and the crypto market continues the upward trend from last week. Bitcoin (BTC) stabilized at $104,000 after a 10.44% increase last week, briefly breaking through the $105,000 resistance level in the afternoon before retreating. If today's daily closing can stay above $105,000, it may continue to rise until it reaches the historical high of $109,588. ETH broke the 200-day EMA (around $2427) on Saturday and found support, briefly breaking through $2600 in the afternoon. Currently, there is a slight pullback, but ETH may continue to rise, retesting the key psychological level of $3000 (the daily RSI is above 84, higher than the overbought level of 70, indicating strong bullish momentum. However, due to the overbought state, the possibility of a pullback is high. Another possibility is that the RSI remains above 70 and continues to maintain an upward trend). SOL continues to perform strongly, despite a pullback after a significant rise to the key resistance level of $180 on Saturday, technical indicators show that the upward trend remains intact. Currently, the price of $SOL is about $176 (RSI slightly above 75, indicating an overbought market; however, the MACD indicator remains bullish, and SOL may again attempt to push toward $180 or higher). This round of market movement is mainly driven by macro policies. The overall fate of the crypto market still depends on the Federal Reserve, as global fiscal policies are sharply tightening, but the Fed has not yet provided the usual monetary easing policies that can offset this tightening.
Despite the fact that the fundamentals of the crypto market currently appear to be strong, even a flourishing blockchain ecosystem cannot fully detach from broader liquidity flows, which is a concern for me regarding whether the current upward trend can be sustained.
If monetary easing policies arrive as expected, combined with favorable macroeconomic changes and accelerated cryptocurrency innovations, it could trigger a new bull market, the impact of which will far exceed Bitcoin itself.
In summary, as long as monetary policy continues to dominate the flow of global capital, the biggest surge in cryptocurrencies may still be rooted in the decisions of central banks around the world.
Okay, let's get back to the main topic. Today, we talk about technological advancements. Last week, the significant Ethereum upgrade dominated the headlines of major news outlets, and Ethereum's price surged as a result. Ethereum is not the only popular cryptocurrency in May; BTC and Solana networks also had some significant upgrades that have far-reaching impacts on the entire crypto network. What exactly are these? Let's go through them one by one:
1. Bitcoin has made a big move: the OP_RETURN limit is gone!
1. What’s going on?
OP_RETURN is a small feature on Bitcoin that allows for inserting non-monetary data into transactions, such as timestamps. But there was a rule: data could not exceed 80 bytes; otherwise, the transaction would be invalid. This rule has been in place since 2014, mainly to prevent people from using the blockchain as a hard drive, making the network too bloated.
However, in recent years, players have had enough! In 2023, the Ordinals protocol emerged, using 'ordinals' to directly embed images and text into the blockchain, bypassing the 80-byte limit. BRC-20 tokens also became popular, relying on this for token issuance. The market is calling for more space, and developers are eager to respond.
At the beginning of this month, the Bitcoin core team decided: the OP_RETURN limit is lifted! You can include as much data as you want (of course, within the 1MB block size). Why was this decision made?
Market demand: Everyone wants to create NFTs, tokens, and decentralized identities; 80 bytes are not enough!
The reality is: miners have long been using Ordinals to embed large files; the rules need to keep up.
Competitive pressure: Ethereum and Solana are thriving in dApps, and Bitcoin needs to step up its game.
However, this decision hasn't pleased everyone. Some are complaining on X that this will turn the blockchain into a 'garbage dump', and many 'minimalists' believe Bitcoin should honestly remain as 'digital gold'.
2. How has the technology changed?
Without the 80-byte limit, transactions can include more items, such as several KB of images or metadata. But this also means:
Node pressure: Running a full node requires storing more data; the blockchain may grow by 10-20GB a year.
Transaction fees: Large file transaction fees are higher, which pleases miners, but small transfers may need to queue.
3. What impact does it have on Bitcoin?
This is a significant turning point for Bitcoin!
New gameplay: Ordinals NFT and BRC-20 tokens can be handled more smoothly, and in the future, decentralized identities can also be developed to attract new players.
Miners profit greatly: Large file transaction fees are high, and BitMEX says the average transaction fee could rise by 5-10%.
Layer 2 opportunities: Combining the lightning network with on-chain data can create new possibilities.
Network bottleneck: With more large files, transactions may be delayed from 10 minutes to 15-20 minutes.
Node dropout: High data storage costs, small nodes may struggle to keep up, affecting network decentralization.
4. What about the future?
This move gives Bitcoin new possibilities. In the future, Bitcoin may bridge with Ethereum and Solana through Layer 2 solutions (like Stacks), without direct confrontation, but rather each doing their own thing.
2. Ethereum Pectra Upgrade: Smart accounts are appealing, but the vulnerabilities are frightening!
On May 7, Ethereum launched the Pectra upgrade. Much has been discussed about the upgrade in previous articles; today we mainly talk about the core EIP-7702. This allows smart accounts to be more user-friendly; you just need to sign to authorize a bundle of complex operations without constantly running on-chain transactions. However, its off-chain signature mechanism has a major vulnerability:
How to attack: Malicious actors use phishing sites or fake dApps to trick you into signing a 'verification message', but this signature can modify your wallet code, directly handing over control to hackers without requiring on-chain confirmation!
How serious is it:
Hardware wallets can't stop it either; signing means you're done for.
Signatures can also be replayed on other chains (like BNB Chain), leading to greater losses.
Signatures are messy hashes that wallets cannot understand, leaving you confused as well.
Real example: Someone signed a 'login verification' on a fake Uniswap site and lost 10 ETH, with even hardware wallets failing to respond.
Current wallets need to be upgraded quickly, adding a signature warning; the Ethereum team is also working on patches, expected to be released in Q3. Users need to take more precautions, avoid signing messages randomly, keep large amounts in cold wallets, and only use small amounts for daily transactions.
3. Solana Agave v2.2: High performance sprint!
Solana has always been known for its speed and low cost, and the title of 'Ethereum killer' is well-deserved. To respond to Ethereum's upgrades, at the beginning of the month, Solana upgraded the Agave validator client to v2.2, aiming to make the network more powerful. This upgrade is a step towards a multi-client ecosystem for Solana, preventing single points of failure, and continuing to compete with the upgraded Ethereum.
Agave v2.2 brings these:
Faster: Block limits have jumped from 50M to 60M computational units, increasing throughput; a new algorithm (ALH) supports billions of accounts.
Cool signature: Added Secp256r1 signature, supporting passwordless login (like Passkeys), both secure and convenient.
Developer-friendly: Loader-v4 makes program deployment simple and allows for adjustments at any time.
Stable scheduling: The greedy scheduler is enabled by default, allowing validators to run more smoothly.
Currently, 19.8% of the staked assets are running v2.2, but many features are still in the 'gated' stage and will be fully opened later. This upgrade makes Solana stronger, but it also comes with some risks:
The great thing is: throughput has increased, fees have decreased, and the transaction success rate can rise by 10-15%. Developers have new tools, DeFi can thrive again, and the multi-client architecture makes the network more resilient.
Minor concerns: Node hardware needs upgrading; otherwise, it won't keep up. Block propagation may be slow, and XDP technology also requires adjustment to the GitHub commit.
Agave v2.2 makes Solana even more powerful in the high-performance race, likely attracting more dApp developers. Solana may currently and in the future be a formidable competitor to Ethereum.
Finally
The upgrades in May combined with the current market trends have made the crypto industry more vibrant! Bitcoin has opened a new door, but whether the Bitcoin ecosystem can explode again remains to be seen; Ethereum's smart accounts are appealing, but vulnerabilities must be addressed first; Solana is speeding ahead, but hardware upgrades may need to keep pace.
As market players, in addition to understanding market trends, we must also keep up with these key technological advancements, plan ahead, and strive to be early birds before the next wave of market changes arrives.
The editor shares the latest developments in the crypto market every day, and your likes and follows are the editor's motivation!
