Last Updated on April 3, 2023 by Bitfinsider
For those who are unfamiliar with the background of Ethereum (ETH), it is a decentralized blockchain platform that enables the creation of smart contracts and decentralized applications (dApps). It was first proposed in 2013 by Vitalik Buterin, a programmer and cryptocurrency researcher, and launched in 2015.
What makes Ethereum unique compared to other blockchain platforms is its ability to execute smart contracts, which are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. This means that once the conditions of the contract are met, the contract is automatically executed without the need for intermediaries or third-party involvement.
In addition, Ethereum uses a cryptocurrency called Ether (ETH) as the native token of the platform. Ether is used to facilitate transactions and incentivize network participants to validate and secure the blockchain.
Since its launch, Ethereum has grown to become one of the most widely used blockchain platforms in the world, with a thriving ecosystem of developers, entrepreneurs, and enthusiasts building a variety of decentralized applications on top of the platform. Some general reasons why ETH is popular among traders includes:
- High liquidity: Ethereum is one of the most widely traded cryptocurrencies, and it has a high trading volume on many exchanges. This means that it is easy to buy and sell Ethereum quickly and at a fair market price.
- Smart contract functionality: Ethereum’s ability to execute smart contracts makes it a popular platform for developers who want to create decentralized applications with built-in automation and self-executing contracts. This functionality can potentially lead to a variety of innovative use cases and increase the value of Ethereum over time.
- Volatility: Like many cryptocurrencies, Ethereum’s price can be highly volatile, which means that there can be opportunities for traders to profit from price movements.
- Growing ecosystem: Ethereum has a large and active community of developers and users, which has led to the creation of a variety of decentralized applications (dApps) that are built on the Ethereum blockchain. The growth of the Ethereum ecosystem can potentially increase demand for Ether and contribute to its long-term value.
Speaking of the growing ecosystem, the much-anticipated Ethereum Shanghai update is scheduled for April 12, 2023, which will allow for users to withdraw their staked Ether. Shapella is planned on the mainnet for epoch 194048, scheduled for 22:27:35 UTC on April 12, 2023, the Ethereum development team revealed in a tweet on March 28.
Over 16.3 million ETH tokens are staked on the Ethereum network but cannot be withdrawn, according to statistics from analytics company Dune. Users who staked their ETH on the Ethereum network as early as December 2020 will be able to withdraw their locked tokens thanks to the Shanghai update, code-named Shapella.
The risk associated with having staked versions of Ethereum, such as Frax’s froTH and Lido’s stETH, is thought to be reduced by allowing withdrawals because they will be redeemable.
What Course Will the Price of Ethereum Take After the Shanghai Upgrade
Expectations for what might happen to the ETH price after the Shapella mainnet goes live are divided. On the one hand, it is anticipated that some investors will want to liquidate their stake holdings for cash. They would leave the Beacon Chain if they made such a move. Node operators would want to keep staking their holdings for higher yields even if they withdrew and sold their ETH.
It is crucial to remember that ETH stakers won’t be able to remove all of their staked tokens at once. Holders can now directly withdraw their staking rewards after a withdrawal procedure has been set in place. This would be equivalent to $1.03 million in ETH, or $1.8 billion at the time of writing. Given that Ethereum’s daily volume varies between US $8 and $10 billion, there is a high likelihood of minimal selling pressure.
Additionally, a daily cap of 20,400 ETH ($85M at the current exchange rate) prevents the amount of ETH staked per validator from being immediately withdrawn. When compared to the everyday trading volume of Ether, this amount is also insignificant.
Due to the relatively low selling pressure, it is safe to state that the upgrade may not have a significant impact on the price of ETH.
On the other hand, the lowered dangers might encourage Ethereum owners to stake their coins on the network and generate passive income. Keep in mind that the ratio of validators to stake payouts is inverse. Therefore, rewards will increase, luring more validators, if the number of node operators declines, probably as a result of stakers removing their ETH. However, given that ETH is currently deflationary, we anticipate more purchasing pressure than selling pressure.
On March 17, the price of Ethereum surpassed the symbolic threshold of $1,700 and since then, it has been consolidated in a sideways price movement. This suggests that volatility will decline as buyers and dealers compete for dominance.
The bullish breakout would be confirmed if the Ethereum price rose from its current level to finish above the upper band of the Bollinger at $1,860 on a daily basis, favoring buyers. In such a move, the purchasers would amass the liquidity above the specified level, supporting ETH in the direction of the $2,030 range high. This would be an increase of 13% from the present values.
ETH would generate a daily candlestick close below the middle band of the Bollinger at $1,740 if it were to move in ETH’s favor and attempt to retreat from the $1,700 psychological level. Given that this level has supported the coin for the previous 14 days, Ethereum’s short-term decline may be limited here.
At the time of writing, the price of Ethereum is $1817.23 as per data on CoinMarketCap. If you are interested to trade ETH, we recommend the Scallop Exchange due to the ease of accessibility, regular promotions and availability of help channels to support your trading journey.
How to Buy or Trade ETH on Scallop Exchange
You can buy or trade ETH on Scallop. As Scallop frequently holds campaigns and events, you should check out its official Telegram group here to see if you can participate and win rewards as you trade.
On Scallop, you can trade ETH as a spot pair (ETH/USDT) in 3 simple steps:
- Sign up and register an account on Scallop
- Buy USDT via Scallop One-click Buy (Follow the step-by-step guide from step 1 to 6)
- Trade ETH/USDT at Scallop Spot
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Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.