Ethereum (ETH) price has increased significantly following the seamless implementation of Shapella upgrade, which allowed validators to withdraw ETH staked in the blockchain since December 2020.
ETH’s price crossed the $2,000 mark since the upgrade on April 12, 2023. Its price hovered around $1,800 in the week leading up to the upgrade.
ETH outperformed Bitcoin (BTC) in the 24-hour period from April 12, 2023. Its price continued to rise since, peaking at $2,135 on April 16, 2023.
Currently, ETH is trading at about $2,101, up 0.47 per cent, in the past 24 hours to 2 pm on Tuesday, according coinmarketcap.com. Its dominance stood at 19.18 per cent, while its 24-hour trading volume dropped 0.59 per cent to $9.22 billion over the previous day.
This seems to be the highest price ETH reached since May 2022. The upgrade also aims to reduce gas fees during periods of high activity to benefit Ethereum developers.
Ethereum’s highly anticipated Shapella upgrade was successfully completed on April 12, 2023, and prices have since shot up by over $200.
The upgrade allows validators to withdraw ETH that have been staked since December 2020. About 15.6 per cent of all ETH were staked and the new upgrade has now effectively unlocked $36.4 billion in staked ETH, according stakingrewards.com.
ETH Price And Volatility
Experts have earlier predicted that the upgrade would have some effect on the ETH price. The validators were earlier required to stake 32 ETH with the blockchain. As validators can finally unlock all of their staked ETH, experts warned that they have the option to exit the chain completely with unstaked ETH. This could flood the exchange with ETH, pushing down the price.
Crypto exchanges received a net inflow of 179,500 Ether (ETH), worth $375 million in the four days after Ethereum’s Shanghai upgrade went live, according to data from CryptoQuant. Traders deposited 1,101,079 ETH to exchanges in three days following upgrade and withdrew 921,579 tokens, making it the largest four-day net inflow in a month. The transfer of token indicates that buyers are about to sell, which may lead to a price decline. But it remains to be seen as all exchanges have not allowed withdrawing ETH.
Coinbase crypto exchange had allowed users to immediately unlock and withdraw their staked ETH via its platform. Since the upgrade, the ETH-USD trading pair on Coinbase recorded $28 million more sell orders than buy orders. Binance will let users withdraw ETH on April 19, which could result in more sell pressure for ETH, CoinDesk quoted crypto research platform Kaiko as saying.
Besides increasing liquidity and market depth for traders, the upgrade will make more ETH available for developers and innovators seeking to build new applications running on the Ethereum blockchain.