In the run-up to Ethereum’s highly anticipated Shanghai upgrade, the second-largest cryptocurrency by market capitalization is struggling to maintain momentum, hovering around the $1.9,000 mark. Investors and traders appear to be exhibiting classic “sell the news” behavior as the leveling approaches, with traders taking profits before the event unfolds.
Ethereum shows strong on-chain data
The Ethereum network is about to undergo a momentous upgrade, known as Shapella, which will finally allow investors to access and redeem the offshoot of Ether tokens they have staked in exchange for interest during of the last three years. Scheduled to take place around 22:27:35 UTC today, the Shapella upgrade was confirmed by Tim Beiko, a prominent figure at the Ethereum Foundation – the organization that serves as the voice of the Ethereum network.
Concerns about the potential risks of activating Ethereum (ETH) withdrawal may be greatly exaggerated. The net impact on the sale should result in only modest price fluctuations, according to data from the chain.
As the Ethereum (ETH) upgrade in Shanghai approaches, speculation abounds that around 170,000 ETH, valued at around $323 million, could be sold after its implementation. However, leading on-chain analytics firm Glassnode suggests that this anticipated influx of liquidity may not have a significant impact on market prices.
Therefore, three distinct scenarios have emerged regarding the potential selling pressure on Ethereum (ETH). The most pessimistic or “bearish” case envisions a massive inflow of liquidity of 1.54 million ETH, or $2.93 billion. However, this scenario is considered highly unlikely. Instead, a more plausible estimate of 170,000 ETH going liquid seems viable, backed by a full set of economic calculations.
What lies ahead for ETH price?
Today, buyers effectively protected the 20-day EMA at $1,830 for Ether, signifying a sustained positive trend for the cryptocurrency. Following the Shanghai upgrade, bullish investors should tackle the resistance at $1,940, with the aim of propelling the price towards $2,193.
However, the sellers will likely put up a strong defense in the $2000-2200 range. If the price of ETH reverses from this zone without crossing the 20-day EMA, it may indicate that the rally has the potential to extend further.
As of this writing, ETH is trading at $1,908, seeing a slight decline of more than 0.5% in the past 24 hours. Leading crypto analyst TradingStat predicts an imminent breakout above the $2,000 threshold. If ETH price breaks above the resistance line of its double top at $1,940, investors’ buying pressure should increase in anticipation of the Shanghai upgrade.
On the other hand, a minor selloff may emerge after the upgrade, which could lead to the rejection of ETH price near the $2,200 mark.