Ether ETH Price Circles Above $1.9K As Shanghai Hard Fork Approaches
Ether (ETH), the native token of the Ethereum blockchain, circled above $1,900 for much of Wednesday, a week ahead of the Shanghai hard fork.
The second largest cryptocurrency measured by market capitalization was recently traded at $1,913, up approx. 2.2%. Earlier in the day, ETH rose to $1,941, the highest level since last August.
“Ether appears to be pushing higher out of a flag pattern, which supports near-term follow-through,” Will Tamplin, senior analyst at technical research firm Fairlead Strategies, told CoinDesk in an email.
The Shanghai upgrade, also called Shapella, will mark the completion of Ethereum’s full transition to a proof-of-stake (PoS) network, and will enable the withdrawal of ETH. It is expected to go live on April 12.
Tamplin said ETH is likely to face its resistance initially near $2,000, “a psychological threshold roughly consistent with the August 2022 high.” The first support is near $1,670, he added.
Bitcoin (BTC), the largest cryptocurrency by market capitalization, was roughly flat from the same time on Tuesday, trading around $28,280. BTC has been capped between $27,000 and $28,500 for much of the past three weeks,
Greg Magadini, director of derivatives at crypto analytics firm Amberdata, noted in an email discussing crypto options markets that ETH’s 25-delta calls have become more expensive than ETH’s 25-delta puts, which showed traders’ preference for upside exposure. Generally, the call buyer is bullish on the market, while the put buyer is bearish.
“The last rally was strongly led by BTC, but now with the upgrade and enthusiasm around Twitter and dogecoin speculation, we are seeing interest start to pick up in altcoins,” Magadini wrote.
ETH continued to become deflationary, with the annual inflation rate currently at -0.32%, according to data from ultrasound.money. This means that the amount of ETH burned is more than what is minted.
Meanwhile, Lido DAO’s LDO and Rocket Pool’s RPL, the floating staking protocols’ governing tokens, both rose over 2%, according to CoinGecko’s data.
Among other altcoins, cross-chain bridge protocol Stargate Finance’s native STG token surged more than 14% on Wednesday, while encrypted messaging protocol Mask Network’s MASK token fell 4%. The CoinDesk Market Index, which measures the overall performance of the crypto market, was recently up 0.6% from a day ago.
“In the bigger picture, if Q2 does indeed turn out to be an alt-driven quarter, in a repeat of 2020, then we expect the best trade to be to fade any sharp volume increases from here on both BTC or ETH,” Singapore-based crypto options trading firm QCP Capital said in an April 4 Telegram broadcast.
“If we are indeed in a rerun of 2020, consolidation in Q2 will prove to be a brief pause before the uptrend resumes in Q3/Q4,” the firm added. “The timing of this will be determined by how quickly the Fed changes course in the face of the rapidly slowing economy.”
