Ethereum Price Prediction as Shanghai Upgrade Goes Live – Will ETH Dump After Withdrawals?
The price of Ethereum (ETH) has risen by 6% in the past 24 hours, with the successful rollout of the Shanghai upgrade pushing the altcoin to $1,984.
This level represents an 18% gain for ETH in the last 30 days and a 65% gain since the beginning of the year, although some commentators suspect that the opening of staking withdrawals could result in an increase in selling pressure for the altcoin.
However, daily limits on withdrawals will prevent any injection of additional ETH into the market from being too large and from happening at once, meaning that price drops could be minimal.
And with the successful introduction of withdrawals likely making ETH staking seem more attractive to retail and institutional investors alike, Shanghai's completion could end up being very bullish for Ethereum.
Ethereum Price Prediction as Shanghai Upgrade Goes Live – Will ETH Dump by Withdrawals?
That ETH has risen in response to Shanghai (rather than fallen) is a very good sign, and the coin's chart reflects such positivity.
Most notably, ETH's relative strength index (purple) has shot above 70 in the past few hours, indicating strong, ongoing momentum.
At the same time, its 30-day moving average continues to rise above its 200-day average (blue), suggesting that ETH is having a breakout rally at the moment.
A key resistance level in this context is undoubtedly $2,000, which could signal further consolidated gains if ETH manages to break it in a convincing manner.
Given that Ethereum's Shanghai upgrade has successfully gone live, this is now a real possibility, with the update's successful completion feeding bullishness among investors.
Despite the relative smoothness with which this update has been rolled out, some people are suggesting that Shanghai may now trigger an ETH selloff, given that it effectively unlocks around 16.3 million ETH (worth some $30.5 billion).
Indeed, some $1.6 billion in Ethereum is now pending withdrawal, which is arguably a significant quantity in light of how Shanghai hasn't even been live for 24 hours yet.
Nonetheless, it's worth remembering that $1.6 billion represents only 5% of the amount staked and only 1.3% of the total circulating Ethereum.
On top of this, the ETH awaiting withdrawal will not be offloaded onto the market at once, with Ethereum's developers setting limits on how many validators can process full withdrawals per day.
As such, unstaked ETH will come onto the market gradually, without doing much to upset prices.
And so far, the fact that ETH's price has risen by 6% today suggests that Shanghai is more of a net gain than a net loss for Ethereum.
In fact, the boost to ETH's price could be very substantial, with some analysts estimating that Shanghai could lead to a scenario where around 60% of Ethereum's total supply ends up being staked.
This would take millions of ETH out of circulation, substantially reducing its supply while also boosting demand for the altcoin.
And with last year's EIP 1559 also resulting in the burning of fees, this supply squeeze could see a notable increase in ETH's price over the next few months.
Seeing as how ETH is on the brink of passing $2,000, it could quite comfortably rise to $3,000 by the middle of the year, while even climbing to $4,000 by the start of 2024.
And if next year does bring a new bull market (made likelier by the next Bitcoin halving), then ETH would be very much fancied to break its current record high of $4,878.
Ethereum Alternatives to Consider
While a bull market for ETH may not materialize for several months, the gradual release of formerly staked ETH could potentially undermine any gains.
However, investors should take note that ETH isn't the only coin in the market with potential right now.
A variety of newer altcoins are also offering above-average gains in the near and distant future.
The Cryptonews Industry Talk team has studied such coins and compiled a list of the top 15 cryptocurrencies for 2023, each with good short-term and long-term prospects.
This list is regularly updated with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features insights by crypto industry players and is not a part of the editorial content of Cryptonews.com.