Ethereum enthusiasts, buckle up! The much-anticipated Shapella upgrade is now live, marking a significant milestone in the evolution of the world’s second-largest cryptocurrency.
For the first time in 28 months, Ethereum stakers can finally withdraw their staked ETH, thanks to the combined Shanghai and Capella forks.
This groundbreaking development has the crypto community buzzing, and it’s time for you to find out how it affects the price of Ethereum.
As you dive into our detailed price analysis and prediction, you’ll uncover the implications of Shapella on the market, from potential staker exodus to increased staking participation.
Is Ethereum poised for a price surge, or will the market fall as validators cash out their stake?
This comprehensive analysis will help you stay ahead of the curve and make informed decisions about your Ethereum investments. Don’t miss out on the opportunity to understand the impact of Shapella on Ethereum’s future trajectory.
Ethereum (ETH) Price Analysis
As markets assess the fallout of the highly anticipated Shapella upgrade, Ethereum is currently trading high at $1,972 (a 24hr change of +2.77%).
Many traders have been caught off-guard by the surprise +6% move following Shapella, with many anticipating a downtick as staking deposit withdrawals opened.
Hi Shapella
Withdrawals have appeared! pic.twitter.com/POqeZwkZJ4
— Etherscan (@etherscan) April 12, 2023
However, it seems markets have become bullish with sentiment around Shapella shifting positive as the Ethereum network strengthens.
This brings ETH’s April gain to an impressive +8% – out-performing traditional financial assets by an impressive magnitude.
Technical structure remains solid, with the continued rally trend built off strong support from the ascending 20 Day MA.
But Ether might not be in the clear just yet, the surprise uptick has pushed the RSI to overheat to a worrying 67.
This could indicate the need for an immediate retracement or consolidation until the RSI cools down from this blaring overbought signal.
The MACD on the other hand provides much needed reassurance to price action, with a very bullish 5.2 reading.
Ethereum (ETH) On-Chain Analysis and Open Interest
Looking On-Chain, the waters around ETH are muddied, despite an overall net position change depicting a deep accumulation phase, it is clear the 30-day change in exchange supply is steadily declining and likely to flip to net inflows in coming weeks.
Worse still, a look at exchange netflow volume highlights a reversal to net inflow yesterday – indicating a potential shift towards a sell-off move as staking deposit withdrawals begin (a process that could take up to 180 days in a slow bleed-out pressure).
Open interest should also be a rising cause of concern among ETH traders, with a huge spike in open interest levels heading into the choppy waters of Shapella last night.
Across all exchanges an additional $1.53bn was added to the table, with an extra $600m stacked up on Binance futures markets alone.
This could paint a lucrative opportunity for market makers, with a majority of this immense stack of open interest ($7.3bn in total) leaning long.
Indeed, overall trader sentiment shows that 53% of open interest is stacked up in long (taker buy) trades, indicating the potential for a downturn.
Ethereum (ETH) Price Prediction
Despite the concerning shift in the RSI and on-chain movements, technical structure remains in a strong rallying posture and this leaves ETH with targeting a clean upside break above $2k to the $2,100 price level (a potential +6.36% move).
However, with the tide seemingly turning as Shapella withdrawals kick in we could well be facing a downside turn to the nearest lower support level at $1,800 (-8.83%).
This leaves Ethereum with an overall Risk: Reward ratio of 0.72 – a characteristic bad entry in face of an overheated RSI, On-chain reversal, and a $7.3bn stack of vulnerable open interest.
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This article was written for Business 2 Community by Sam Cooling.
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