Tomorrow is decisive for the Ethereum price, Shapella update, and macroeconomic news could set the course.
Ethereum has had a lot to say since the beginning of the year. Ethereum’s price spiked alongside Bitcoin earlier this year, ETH in particular has managed a 63% gain so far this year. But the main and most discussed news is the new update of Shapella (Shanghai-Capella), scheduled for April 12th.
Shapella Upgrade Generates Uncertainty in Ethereum
The Ethereum update is scheduled for April 12th, Shanghai Capella or Shapella is a major update that comes after Ethereum changed from a proof-of-work mechanism to a proof-of-stake mechanism, known as “The Merge”. This update will allow validators to withdraw the stETH tokens they have staked on the Beacon Chain. In addition, major changes have been added to the runtime layer and consensus layer, as well as improvements to the API tools.
What is the Beacon Chain?
The Beacon Chain is an important part of Ethereum that introduced the proof-of-stake mechanism. This mechanism maintains network security and allows validators to earn more ETH by staking their tokens as collateral activating the validator software. Unlike mining, staking does not require large hardware and energy upfront costs, making it more affordable and less centralized.
Additionally, staking locks collateral assets, increasing the protocol’s ability to punish malicious actors after an attack. The transition to proof of stake has made Ethereum more secure and decentralized, and the more participants it has, the more resistant it is to attacks.
The big Event on April 12
The Shapella hard fork, also known as the Shanghai hard fork, is an event that will gradually release ETH staked on the Ethereum Beacon Chain. Currently, there are about 18.1 million ETH staked on the network, representing 15% of the total supply and worth about $33.7 billion, according to the Ultrasound.Money platform.
The Shapella update will allow news publication about the ETH withdrawal activation from staking both positive and negative, according to the Ethereum price so far and according to the price at which people have staked 32 ETH, the odds that they will sell or hold Ethereum is 50/50.
There is uncertainty regarding the Shapella update which has risen concerns about the possibility of a complete liquidation of the 18 million ETH placed in the Beacon Chain, as this will facilitate the progressive withdrawal of these funds in the coming weeks and months.
Ethereum Forming a Possible Double Top
It is important to note that Ethereum’s price is trading at $1914, after a bullish move yesterday, the price of ETH is struggling with a liquidity zone at $1940, a price level that has kept Ethereum on the sidelines since April 5th.
In the short term, it must be considered the possibility that the ETH price could hit a double top, as the price has touched the $1940 zone twice and the rejection was strong. If so, Ethereum’s price could return to the $1700 area, which has moved from resistance to support.
On the other hand, if the price creates a range and breaks it higher, Ethereum could be seen grabbing $2040, which would be the range target the price could form and the highest ETH price since August 2022.
Tomorrow’s volatility will be high so a suitable recommendation is to wait for strong patterns to create entry and exit positions, remember the prize has to come to you, don’t chase it.
By Marina Meza
