Ethereum‘s price has surged to over $1,900, marking a 7-month high ahead of the Shanghai and Capella upgrades on April 12. The price increase may be attributed to the anticipation of implementing the Ethereum Improvement Proposal (EIP)-4895, which will enable validators and stakers to withdraw staked ETH from the Beacon Chain. This and other EIPs are expected to increase transaction speeds and reduce transaction costs.
Analysts suggest the recent surge in ETH’s price could also be due to expectations that the Fed may ease up on its quantitative tightening efforts, causing cracks in the global banking industry. Additionally, the flexibility in staking is expected to increase demand for Ether.
While the recent gains have been recorded by both Ethereum and Bitcoin, ETH/BTC has increased by nearly 3% in the last week, according to TradingView. The execution layer, where all smart contracts and protocol rules are, and the consensus layer, ensuring all network validators follow these rules, are set to be upgraded with the Shanghai and Capella updates.
It is worth noting that ETH’s price dropped sharply following the execution of the Merge on Sept. 15, 2022. Some analysts and traders suggest unlocking staked Ether may create sell pressure, but what will occur after the Shanghai and Capella updates is purely speculative.
In the past nine months, addresses holding 100-10k ETH have accumulated $4.24B, indicating that large holders or “sharks” have accumulated steadily since last summer. This is the largest amount they have held in over a year, and the recent price surge may indicate their confidence in the future of Ethereum.
ETH/USD Technical Analysis
Meanwhile, ETH/USD technical analysis outlook indicates the pair is up by 5% and has challenged the $1,900 handle. This level is currently the highest level reached in April. On the downside, a breakdown of $1,860 may lead to a retest of the 200-day SMA at $1,744 and then towards $1,545. If ETH/USD stays above $1,860 in the near term, bulls should target the previous record high of $2,040.
Ethereum has surged to a 7-month high as the Shanghai and Capella upgrades are near. Additionally, demand is expected to increase because of staking flexibility, while traders speculate that the Fed may ease up on quantitative tightening efforts.
Technical analysis point to more upside potential for the pair, but a breakdown of $1,860 could cause ETH/USD to retest the 200-day SMA. Large traders have accumulated over $4B in Ether in the past months, indicating their confidence in Ethereum’s future.
