In the run up to Ethereum’s highly anticipated Shanghai upgrade, the second largest cryptocurrency by market capitalization is struggling to maintain its momentum, hovering around the $1.9K mark. Investors and traders seem to demonstrate classic “sell the news” behavior as the update approaches, with traders taking profit before the event unfolds.
Ethereum shows strong on-chain data
The Ethereum network is set to undergo a momentous upgrade, known as Shapella, which will finally allow investors to access and redeem the leg of Ether tokens they have staked for interest over the past three years. Scheduled to occur around 22:27:35 UTC today, the Shapella update has been confirmed by Tim Beiko, a prominent figure in the Ethereum Foundation, the organization that serves as the voice of the Ethereum network.
Concerns surrounding the potential risks of triggering the Ethereum (ETH) decommissioning may be largely overstated. The net sales impact is likely to cause only modest price fluctuations, according to the chain’s data.
As the Ethereum (ETH) Shanghai Update approaches, speculation abounds that around 170,000 ETH, valued at approximately $323 million, could be sold following its implementation. However, leading on-chain analytics firm Glassnode suggests that this anticipated influx of liquidity may not have a significant impact on market prices.
Consequently, three distinct scenarios have emerged regarding the potential selling pressure on Ethereum (ETH). The most pessimistic or “bearish” case foresees a massive inflow of liquidity of 1.54 million ETH, equivalent to 2.93 billion dollars. However, this scenario is considered highly unlikely. Instead, a more plausible estimate of 170,000 ETH becoming liquid seems feasible, backed by a comprehensive set of economic calculations.
What lies ahead for the ETH price?
Today, the buyers effectively safeguarded the $1,830 20-day EMA for Ether, which signifies a sustained positive trend for the cryptocurrency. Following the Shanghai upgrade, bullish investors are expected to tackle the resistance at $1,940, aiming to push the price towards $2,193.
However, sellers will likely put up a strong defense in the $2,000 to $2,200 range. If ETH price reverses from this zone without breaking out of the 20 day EMA, it may indicate that the rally has the potential to extend further.
At the time of writing, ETH is trading at $1908, seeing a slight drop of more than 0.5% in the last 24 hours. Leading crypto analyst TradingStat forecasts an imminent breakout above the $2,000 threshold. If ETH price breaks above the resistance line of its double top at $1,940, investor buying pressure is expected to increase ahead of the Shanghai update.
On the other hand, a minor selloff may emerge after the upgrade, which could cause the ETH price to face rejection near the $2,200 mark.
This post Ethereum Struggles To $1.9K Amid “Sell The News” Sentiment Surrounding Shanghai Update!
was published first on https://coinpedia.org/altcoin/ethereum-struggles-at-1-9k-amidst-sell-the-news-sentiment-surrounding-shanghai-upgrade/
