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Ethereum set for wild Wednesday

Although Bitcoin has today soared past the $30k mark for the first time since June, the crypto world’s attentions this week are likely to be more focused on Ethereum’s next big upgrade, called ‘Shanghai’.

This upgrade allows Ether owners who have staked their tokens since December 2020 to begin withdrawals starting tomorrow (Wednesday, April 12th).

Ahead of such a crucial event in this blockchain network’s development, prices of the Ether token is testing the $1940 resistance level, which had already repelled bulls earlier this month.

ETH set for Wild Wednesday


It’s uncertain whether “Shanghai” would result in ETH price declines as investors exit, or whether there would be fresh incoming bids for the unlocked Ether that drive prices even higher.

With more than $2 billion worth of Ether set to be withdrawn through the weekend, according to Coin Metrics, “Shanghai” could unleash volatility ahead for ETH and the rest of the crypto complex:

  • If this highly anticipated software upgrade to the Ethereum blockchain does drive ETH prices higher, then bulls are set to eye the psychologically-important $2k mark – a level not seen since August 2022.
  • However, withdrawals en masse without the accompanying demand for the released tokens may see ETH prices test the mid-$1700 region for immediate support.


Also on Wednesday …

Markets will also be keeping an eye on the tier-1 event that is the release of the latest US inflation data.

Economists are forecasting a year-on-year print of 5.1% for the March consumer price index (CPI), which would mark a 9th consecutive month of slowing inflation.

However, last month’s core CPI is forecasted to tick higher at 5.6% compared to March 2022. That would be faster than February’s year-on-year figure of 5.5%.

A print that exceeds forecasts may dampen crypto prices.

After all, stubbornly elevated US inflation would imply that the Fed has to keep draining liquidity out of global financial markets, at a time when the crypto world is already suffering from thinned-out liquidity and trading volumes in the wake of last year’s collapse of FTX.


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