In the run-up to Ethereum’s highly anticipated Shanghai upgrade, the second-largest cryptocurrency by market cap is struggling to maintain its momentum, hovering around the $1.9K mark. Investors and traders seem to demonstrate a classic “sell the news” behavior as the upgrade draws near, with traders taking profits before the event unfolds.
Ethereum Shows Strong On-Chain Data
The Ethereum network is set to undergo a momentous upgrade, known as Shapella, which will finally enable investors to access and redeem the offshoot of Ether tokens they have staked in return for interest over the past three years. Scheduled to occur around 22:27:35 UTC today, the Shapella upgrade has been confirmed by Tim Beiko, a prominent figure in the Ethereum Foundation – the organization that serves as the voice of the Ethereum network.
Concerns surrounding the potential risks of Ethereum’s (ETH) unstaking activation may be largely overblown. The net selling impact is likely to cause only modest price fluctuations, according to on-chain data.
As Ethereum’s (ETH) Shanghai upgrade approaches, speculation abounds that around 170,000 ETH, valued at approximately $323 million, could be sold following 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.
Consequently, three distinct scenarios have emerged regarding the potential selling pressure on Ethereum (ETH). The most pessimistic or “bearish” case envisions a massive liquidity influx of 1.54 million ETH, equivalent to $2.93 billion. However, this scenario is deemed highly improbable. Instead, a more plausible estimate of 170,000 ETH becoming liquid appears viable, supported by a comprehensive set of economic calculations.
What Lies Ahead For ETH Price?
Today, buyers effectively safeguarded the 20-day EMA at $1,830 for Ether, signifying a sustained positive trend for the cryptocurrency. Following the Shanghai upgrade, bullish investors are expected to tackle the resistance at $1,940, aiming to propel the price toward $2,193.
However, sellers will probably put up a strong defense in the $2,000 to $2,200 range. If the ETH price reverses from this zone without breaching the 20-day EMA, it may indicate that the rally has the potential to extend further.
At the time of writing, ETH is trading at $1,908, experiencing a slight dip of over 0.5% in the past 24 hours. Leading crypto analyst, TradingStat, forecasts an imminent breakout above the $2,000 threshold. If the ETH price surpasses the resistance line of its double-top at $1,940, investor buying pressure is expected to rise in anticipation of the Shanghai upgrade.
On the flip side, a minor sell off may emerge following the upgrade, potentially causing the ETH price to face rejection near the $2,200 mark.
