Ethereum Surges To A 7-month Peak Before Shanghai & Capella Upgrades

Apr. 6, 2023
Ethereum Surges To A 7-month Peak Before Shanghai & Capella Upgrades

Ethere has reached a 7-month high, surpassing the $1,900 barrier and trading at over $1,911 for the first time in months. The Ethereum has dropped $1,916 and has breached the $1,900 mark for the first time in over seven months.

However, just a week before the second-largest cryptocurrency by market capitalization’s next major update enables staking withdrawals.

Ethereum hasn’t surpassed $1,900 since August 16, 2022, when a general crypto decline began, data reveals that. During that time, the US Federal Reserve aggressively increased the federal funds rate to counter inflation.

Scheduled for April 12, the Ethereum Shanghai hard fork will incorporate Ethereum Improvement Proposal (EIP)-4895, which permits validators and stakeholders to transfer their staked Ethereum from the Beacon Chain to other EIPs, to boost transaction speed and lower transaction expenses.

Two factors may have caused the recent price surge. Firstly, there are expectations that the Fed may relax its economic tightening efforts due to gaps in the global banking system caused by rate increases. Secondly, there is an increasing demand for Ethereum as staking is planned to be more flexible.

According to CoinMarketCap data, Ethereum& Bitcoin trading pair, which compares the values of Ethereum and BTC, has increased by about 3% over the past week, despite a $28,526 decline in Bitcoin’s ticker price. This implies that both reasons contributed to the recent increase in the price of Ethereum.

Capella Upgrade To Follow Shanghai

The fork is known as the client-side execution layer in Shanghai. On the client-side consensus layer, Capella is the name of the upcoming upgrade. It is scheduled to be executed shortly after Shanghai, specifically on April 12.

The execution layer houses all smart contracts and protocol rules. The consensus layer ensures that all network validators comply with these rules.

On September 15, 2022, ETH’s price experienced a significant drop of nearly 25% within a week following the implementation of the Merge, as per the data.

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Analysts and dealers believe, unlocking staked Ethereum may lead to selling pressure. It is still unclear what will happen after the Shanghai and Capella updates. Many are speculating on the results of these occurrences.

Rida Fatima

News writer
An ardent wordsmith with a rich five-year background in delving into the realms of finance and cryptocurrencies. Alongside curating captivating blogs, Unique's talents extend to crafting imaginative and engaging content.