Ether ETH price rises above $2.1000 to boost post-Ethereum Shanghai upgrade

Good morning. Here’s what happens:

Prices: Ether surges one day after Ethereum Shanghai upgrade; bitcoin was also heading towards $31K.

Insight: The mass unlocking of the bet ETH that some crypto market observers predicted did not happen. Ether’s price rose the outlook for Ethereum and liquid stake derivatives is encouraging.

Ether Rises Past $2.1K; Bitcoin Inches Towards $31K

Crypto market watchers expecting selling pressure after Shapella to send Ether̵[ads1]7;s price plummeting endured a day of disappointment.

The second-largest cryptocurrency by market capitalization began steadily rising shortly before US stock markets opened, stopping only after ETH’s price had climbed above $2,000 for the first time since last August. Ether recently traded above $2,100, up more than 11% in the past 24 hours, as investors chose the prospect of additional liquidity while reaping stake rewards over the desire to take immediate profits and run.

“Many traders had been waiting for the end of the upgrade to start long position accumulation,” Ilya Volkov, CEO and co-founder of crypto trading service provider YouHodler, wrote to CoinDesk in an email. “Therefore, neutral news on US inflation plus pent-up demand pushed the ETH price up.”

Volkov noted that if current macroeconomic conditions do not worsen, ether is unlikely to deviate from a price rally that began with other major cryptos at the beginning of the year, even if selling pressure increases in the following weeks. “Basically, the ETH price is staying in the same upward trend channel from the beginning of the year,” he wrote.

Shapella, also called the Ethereum Shanghai upgrade, is the latest stage in the Ethereum network’s transition from a proof-of-work (PoW) to more energy-efficient proof-of-stake (PoS) protocol. Crypto market observers had been divided on the impact, with some predicting a price swing while others expected little change.

Bitcoin also continued its more moderate pace, recently rising towards $31,000, up more than 2.5% from Monday at the same time. Other major cryptos spent much of Thursday in the green with ARB, the token of layer 2 blockchain Arbitrum, recently rising around 33% and APT, the native crypto of layer 1 blockchain Aptos, jumping around 12%. The CoinDesk index, a measure of the performance of the crypto markets, was recently up almost 5%.

Stocks closed higher with the technology-focused Nasdaq and the S&P 500, which has a large technology component, rising 2% and 1.3%, respectively. A number of crypto-related stocks continued their recent rally with miners Marathon Digital and Hut 8 Mining each rising around 15%. Recession-feared investors also continued to show their appetite for other assets holding their value, sending gold above $2,050, close to its record high of $2,069 set in 2020.

Will ether continue to rise? CoinDesk analyst Glenn Williams suggested that ETH deposits would provide some signals about the way forward. Since January 2021, the trajectory of ether deposited in ETH stake contracts has risen steadily, a direction that suggests the asset is gaining, not losing, favor,” Williams wrote. “Over the coming weeks and months, this metric is likely to flatten as investors which must un-stake ETH begin the process of doing so. But for those looking to bet, Shapella’s completion signals reduced risk, increased liquidity and brought an increase in asset value.”

Why didn’t you sell the news of Ethereum’s Shanghai upgrade?

Based on the numbers, it appears that many ether (ETH) players have decided to hold on to their coins. Although several analysts predicted that the just-completed Ethereum Shanghai hard fork (along with the separate Capella upgrade, collectively known as “Shapella”) would be a “sell the news” moment, ETH has actually climbed to eight-month highs. The second-largest cryptocurrency by market capitalization traded above $2,000 for the first time since last summer, after gaining ~3% during trading hours in Asia.

This article is taken from The Node, CoinDesk’s daily roundup of the top stories in blockchain and crypto news. You can subscribe to get the whole newsletter here.

What this says about the viability of Ethereum and the outlook for the price of ETH is an open question. Shanghai, the backward-compatible hard fork, unlocked the ability for Ethereum stakers to withdraw the tokens they pledged to the Ethereum contract of deposit used to validate the proof-of-stake network, as well as the token payments they received for doing so. Many players originally pledged 32 ETH to become validators in 2020, and haven’t really had access to the coins since.

So the 18 million plus ETH currently staked (worth around $33 billion) has not led to a flood of sales. Loyal CoinDesk readers probably knew that the “selling pressure” on ETH was exaggerated. As Amphibian Capital CEO James Hodges wrote on Monday, the vast majority of ETH validators were in the red before the event, making it unlikely they would cash out at a loss. Now that crypto prices are rising, led in particular by bitcoin, which broke the all-important $30,000 threshold this week, fortunes could be turning.

Read the full story here:

Ethereum’s Shanghai upgrade is complete and the network is now processing stake withdrawals. With the “First Mover” to discuss “Shapella”, as the upgrade is also called, is a senior protocol engineer at Ethereum client Besu, Justin Florentine. Also, the internet giants and their metaverse moves have some regulators worried. Sebastien Borget, co-founder and COO of The Sandbox, joined to discuss. Plus the latest on the FTX bankruptcy case and a closer look at the crypto scene in South Korea.

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