Ethereum price hints at pullback as centralization risks are likely to emerge after Shanghai upgrade goes live


Share:
  • Ethereum price struggles with a significant resistance level at $1,677.
  • Rejection could likely result in a pullback to $1,545, but under dire circumstances, ETH could tag $1,422.
  • Invalidation of the bearish thesis will occur on the flip of the $1,700 hurdle on a daily timeframe. 

Ethereum (ETH) price shows a lack of bullish momentum after its new rally formed a local top. This exhaustion led to a minor retracement that caused ETH to flip a recently formed support level into a resistance barrier. Going forward, investors need to exercise caution to not get caught in the choppy price action

Also read: Coinbase enters the L2 race: Will this spell disaster for Arbitrum, Polygon and other Layer 2 solutions?

Ethereum price is directionless

Ethereum price has been struggling to overcome the $1,677 resistance level since January 20, but has failed each time. Although on a lower timeframe, ETH flipped this hurdle, it failed to sustain above it for a long period of time. 

Now, Ethereum price is firmly trading below $1,677, but a continuation of this week’s bearish pressure could send the smart contract token to tag the 70.5% retracement level at $1,545. If the sellers fail to take a break, ETH could produce a lower low below the February 13 swing low at $1,434. 

Such a move could worsen the situation and knock Ethereum price to clear the inefficiency at $1,422. While this inefficiency might ease the selling pressure, a stable support floor is not present until $1,347.

ETH/USDT 4-hour chart

ETH/USDT 4-hour chart

Regardless of the recent pullback, if Ethereum price produces a decisive flip of the $1,700 hurdle on a daily timeframe, it would invalidate the bearish thesis. Such a move would further attract sidelined buyers and potentially trigger a run-up to $1,800, followed by a retest of the $2,000 psychological level.

Coinbase enters Ethereum L2 race

Coinbase announced its foray into the Ethereum Layer 2 solution race on February 23. The US poster child for crypto exchanges revealed the launch of its L2 solution known as "Base." The said L2 will be built using Optimism's OP stack, another L2 solution for ETH. This new blockchain will be available for Coinbase users, all 100 million of them and their $80 billion in assets, allowing self-custody dream a reality. This move from the exchange is a significant one and is positive for the fundamental aspects of Ethereum.

Also read: Coinbase enters the L2 race: Will this spell disaster for Arbitrum, Polygon and other Layer 2 solutions?

Staking centralization post-Shanghai upgrade

The Shanghai upgrade will allow stakers to withdraw their holdings. While there is a question about the flood of liquidity, the more important question one needs to address is centralization. With major players in the industry stepping into the staking field, it might become easy for the average Joe to stake their holdings via centralized platforms like Coinbase, Binance, and so on. If this trend continues, there might be a high degree of centralization in the Ethereum network.

Also read: Ethereum Zhejiang testnet for staked ETH withdrawals set to go live ahead of Shanghai hard fork

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

Bitcoin, Ethereum prices struggle after mixed US NFP data

Bitcoin, Ethereum prices struggle after mixed US NFP data

BTC and ETH prices experienced a temporary pullback as crypto market participants reacted to the news of the US NFP data release for May. Similar to the situation in April, the number of Nonfarm Payrolls added far exceeded the market’s expectations.

More Cryptocurrencies News

Solana: A break above $26.30 would spell doom for bears

Solana: A break above $26.30 would spell doom for bears

SOL price has been trading with a bullish bias after an explosive breakout on December 30. However, because of volatility and the gloom in the broader crypto market, SOL has been unable to break above a key hurdle at $26.30, causing the price to trade sideways.

More Solana News

Bitcoin Weekly Forecast: BTC targets $30,000 as short-term bias turns bullish

Bitcoin Weekly Forecast: BTC targets $30,000 as short-term bias turns bullish

Bitcoin (BTC) price shows a clear sign of the bulls’ victory. After failing to trigger a steep correction, bears look now out of context, at least in the short term, allowing buyers to restart a minor uptrend.

More Bitcoin News

China crypto community picks Ethereum, Arbitrum and BNB Chain as top protocols

China crypto community picks Ethereum, Arbitrum and BNB Chain as top protocols

Ethereum, Arbitrum and BNB Chain protocols are top picks for the Chinese crypto community, data from a report shows, a possible bullish catalyst for tokens related to these protocols as Hong Kong opens the door of crypto to retail investors.

More Cryptocurrencies News

Bitcoin: BTC targets $30,000 as short-term bias turns bullish

Bitcoin: BTC targets $30,000 as short-term bias turns bullish

Bitcoin (BTC) price shows a clear sign of the bulls’ victory. After failing to trigger a steep correction, bears look now out of context, at least in the short term, allowing buyers to restart a minor uptrend. 

Read full analysis

BTC

ETH

XRP