The market is intently watching the altcoin’s price movement as the much anticipated Shanghai upgrade for Ethereum draws near. The price of Ethereum dropped by 2.5% over the previous day to $1,872. However, since the Shanghai upgrade fully completes Ethereum’s move to a proof-of-stake consensus mechanism, investors are expecting a gain in the medium-to-long term.
Some investors are worried that the Shanghai upgrade would make it possible to withdraw staked ETH, which might trigger a selloff and cause greater losses for the cryptocurrency. However, withdrawal restrictions on a daily basis will stop any substantial selloff from occurring all at once.
Indicators for Ethereum are indicating solid purchasing momentum despite the minor drop, and the currency’s 30-day moving average is still rising above its 200-day moving average with no indications of stopping. Furthermore, the relative strength index is now hovering around 60, but if the Shanghai upgrade is successfully deployed, it might go as high as 70.
Approximately 16.3 million ETH, worth $30.5 billion, might be made available by the upgrade, but due to limitations imposed by Ethereum’s staking mechanism on the number of complete withdrawals that can be performed in a single day, it is not feasible for all of the ETH to be released into the market at once.
Analysts believe that the improvement will cause ETH staking to steadily increase, decreasing the amount of ETH in circulation and driving up the price of the alternative currency. After Shanghai is finished, according to JPMorgan analyst Nikolaos Panigirtzoglou, Ethereum’s staking ratio will go to 60%, which might cause the price of Ethereum to increase. Ethereum is anticipated to surpass $2,000 in the weeks after the Shanghai upgrade is finished, with a chance of hitting $3,000 by the middle of the year. Ethereum may possibly surpass its current record high of $4,878 if a bull market develops in the next year.
