Ethereum rose with a $2000 target amid Upcoming Shapella Update
ETH/USD is trading at $1836.74 +2.22% from its previous 24 hours. As the price of the second-most valuable cryptocurrency has climbed by more than 50% this year, market participants believe that the upcoming upgrade may finally lead to a massive bullish sentiment in the ETH, the native token of Ethereum.
- ETH/USD is trading at $1837, increasing by over 3% in a week.
- As investors await the April Shapella upgrade, a continuously rising trend in ETH staking inflows provided support.
- The upgrade will add additional functionalities to both the execution and consensus levels.
The Next Huge Upgrade for Ethereum
The much-awaited Shapella update will go live on April 12, according to a March 28 announcement from the Ethereum Foundation. The news follows the successful activation of the Shapella forks on the Goerli and Sepolia testnets.
The Shapella upgrade is a combination of two events, Shanghai and Capella. The sole distinction between the two is the layers, but both involve releasing Ethereum (ETH) from its staking. Therefore, Shanghai is in charge of the execution layer (EL), while Capella is in charge of the consensus layer (CL).
The bug bounty has increased to $500,000 as Shapella draws near, according to the Ethereum Foundation. The effective rollout of the update will unlock over 17 million ETH, or around 15% of the total supply. The developers also have three further changes planned that will help optimize the gas fees related to certain activities.
Furthermore, the update is the final step required for Ethereum’s proof-of-stake network validators to release ETH locked in a smart contract on the Beacon Chain.
First and foremost, the upgrade will make it possible for holders of staked tokens to withdraw their ETH, a significant functionality. Therefore, many stakeholders will be eagerly awaiting this update because there are over 16.35 million ETH staked on the network.
ETH staking activity
The Shapella upgrade will increase staking activity on the network by lowering the barrier for getting out of staked positions.
Moreover, ETH staking inflows raised for a third straight day, which is a bullish indication. CryptoQuant shows a rise in staking inflows to 28,320.
It raises worries that early stakers may rush to unstake and dump their coins by allowing access to users withdrawing ETH from the Beacon Chain. However, the Ethereum Foundation is taking action to stop a large amount of ETH from being liquidated on the open market.
As a result, seven minutes earlier than the anticipated update date, Binance will halt allowing users to withdraw ETH and other ERC-20 tokens. Nonetheless, there will be no interruption in trading of these tokens.
Moreover, experts predict that traders may try to forerun the selling pressure by putting short orders in the futures market with less than a week until the upgrade. In the initial days following the upgrade, there will likely be a surge in ETH withdrawals following the Shapella update, which will put pressure on prices in the short run.
However, when the selling slows, and more people may start to bet ETH due to the lower risk and higher rewards, the market circumstances may support more upside in the long run.
Furthermore, the new development has received strong feedback from the Ethereum community and the wider crypto industry, and market players consider that this might eventually lead to a bullish situation for ETH/USD.