Ethereum It is currently following the general crypto market trend at this point and has only recorded slight gains in the last 24 hours. Since the bear market is in full swing, consists of a large number of cryptocurrencies there is still a risk that they will continue to lose value. However, for Ethereumes, an uptrend could be on the horizon and that has to do with staking on the network.
Shanghai Upgrade Will Drive Ethereum High
Currently, compared to the other Layer 1 Proof-of-Stake networks in the industry, Ethereum sees the lowest percentage of supply staked. With less than 14% of the ETH supply being staked, it boils down to there being no withdrawal mechanism for those participating in the network, but this could change very soon and add new momentum to the market.
The Ethereum “Shanghai” upgrade is expected to happen sometime in March 2023, and a Matrixport report shared with NewsBTC via email expects it to be a bull trigger for the digital asset. As it states, “it seems highly likely that more ETH will be staked after March and this could put upward pressure on ETH prices.”
The reason for this is simple; The more ETH staked, the less supply there is in the market, and scarcity leads to higher prices. Rather than the ETH staked volume actually falling, it is expected to increase as once withdrawals are available, investors will feel more confident about staking their coins knowing they can easily get it back.
“As more ETH is being staked and withdrawn from circulation, as long as ETH remains staked, downward price pressure seems capped.”
Another rally to $1,600 for ETH
The report goes further on the expected price reaction for an Ethereum after the “Shanghai” upgrade. It notes that the digital asset is already breaking out of its sideways consolidation, which is a good thing since such a breakout from previous consolidations had led to a rally of up to 39% in 2022.
ETH jumps above $1,250 | Source: ETHUSD on TradingView.com
So, should there be another breakout like this one, it is possible that the digital asset could see a surge of over 27% like it did in October 2022. This would obviously take its price back to $1,600 with a 27% rally, and above $1,750 with a 39% rally. It also forecasts lower volatility for 2023, but still expects a 9.8% rise with implied volatility of 63% for March 23.
Aside from the factors outlined in the Matrixport report, another thing that could support this bull case is a buy the rumor event. These often occur in the run-up to major upgrades such as “Shanghai,” where investors benefit from the expectation of boosting the price of a digital asset. Therefore, multiple rallies could be triggered in the months and weeks leading up to the March upgrade that would take the price of ETH to at least $1,500.
Follow Best Owie on Twitter for market insights, updates and the occasional funny tweet… Featured image of Ethereum price chart from TradingView.com
Source: Crypto News Deutsch