- Ethereum price noted sudden bullishness following the execution of Shapella and shot up by over 6%.
- The Shanghai-Capella upgrade was met with some setbacks, as many validators failed to upgrade due to a lack of incentive.
- ETH could increase by 20% by April 2023, when withdrawals on the mainnet will be activated, pushing price to $2,000.
Ethereum was expected to be the center of attention this week owing to the Shanghai-Capella upgrade, but the macroeconomic conditions did not let that happen.
While the United States banking crisis continues to instill concerns among the general public, the successful deployment of the Shanghai upgrade could serve as a motivation for investors to act bullish again.
Ethereum Shanghai upgrade goes live
Ethereum underwent the Shanghai-Capella upgrade, also known as the Shapella upgrade, on Tuesday. The upgrade will enable validators to withdraw the ETH they have staked since 2020. The hard fork went live on the Goerli testnet, which is the last test run before withdrawals go live on the mainnet around April 2023.
However, despite the successful hard fork, the upgrade was met with some issues as the participation from validators was not as per the expectations.
Ethereum core developer Tim Beiko explained the same in a tweet on Wednesday, stating that the withdrawals are being processed, but many validators have not yet upgraded. As noted by Beiko, the reason behind this is the lack of incentive to monitor the requests, as the ETH on the testnet is worthless as opposed to the actual value of ETH for the validators.
Deposits are being processed (https://t.co/CxYtPcGMCp), but it seems like several validators haven't upgraded. Looking into it— timbeiko.eth (@TimBeiko) March 14, 2023
One challenge with testnet validators is that given the ETH is worthless, there's less incentive to run a validator/monitor it.
He also discussed other possible reasons for the delay in withdrawals, saying,
“Another possible cause is the large # of withdrawal credential changes processed right at the fork. Given this is the first time people can submit those changes, there are many more that need to be processed, which can lead to missed blocks/attestations on low-resource nodes. (sic)
Beiko expects this issue to be only limited to the testnet as the nodes on Goerli are being run with far less resources than the nodes on the mainnet.
Ethereum price notes no change
Following the hard fork, there was an immediate spike in Ethereum price as the biggest altcoin in the world shot up by more than 6%. However, this did not last for long as ETH came back down to close around $1,700 on Tuesday. At the time of writing, the price dipped by another 3.5% to trade at $1,644, but growth is expected by the time mainnet withdrawals arrive.
Ethereum price is still hovering close to the critical resistance at $1,776, which needs to be flipped into a support level for a sustainable rise. ETH already marked the year-to-date all-time high on Tuesday and would be at a six-month high upon breaching $1,776.
ETH/USD 1-day chart
Successful retest as support and a bullish narrative surrounding the upgrade could fuel recovery, and the altcoin could end up rising by 21.5% to tag $2,000.
But as mentioned above, the terrible macroeconomic conditions could have an impact on the price, and corrections could bring ETH down to $1,552. This level marks the critical support line, and losing it would invalidate the bullish thesis, making a climb to $2,000 by April difficult for the cryptocurrency.
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