Ethereum (ETH)’s good start to the year continued into February as the token of the smart contracts traded 44% above the January 1 opening. Ether, which is the world’s second-largest cryptocurrency by market capitalization, was up around 1.1% on Monday to change hands just above $1,700, with its weekly gains standing around 15%.
“Majority of ETH Stakers Are Underwater” – Binance
A report released by Binance Research on Thursday, February 2023, revealed over 16.5 million ETH (over $28 billion at current prices) has been staked on the Beacon Chain since its launch in late 2020. This staking has been validated by roughly 520,000 validators, with the report mentioning Lido as the largest ETH staker accounting for approximately $5 billion in staked ETH or about 17% of the market.
Ethereum’s Shanghai Upgrade, specifically EIP-4895, is expected to allow validators to withdraw their staked ETH (stETH) and any accrued staking rewards. The upgrade will introduce two forms of withdrawals: partial withdrawals and complete withdrawals. Partial withdrawals refer to withdrawing any earned staking rewards over the initial 32 ETH staked on the Beacon Chain, while total withdrawals refer to redeeming the entire balance.
The Binance Research report claims that many ETH stakers are underwater. According to the report, ETH stakers “have a little financial incentive to sell at the current ETH price (at least on a purely mathematical basis).” Explaining this further, the report states:
“… a sizeable amount of ETH (around 2M) was staked at prices in the US$400 – 700 range – this represents the earliest stakers in Dec 2020 – a group that is likely illiquid given that liquid staking was far less known at the time.”
Binance researchers acknowledge that this represents a considerable chunk of staked ETH and “currently at a profit, given these were the earliest stakers in the market, we can imagine these are some of the strongest Ethereum believers.“
The Shanghai Upgrade is expected to help those who had previously hesitated to stake their Ether since withdrawals will eliminate the liquidity risk and uncertainty of an undefined lock-up period.
According to the report, this could result in a new cohort of new participants, bringing a certain amount of buying pressure to ETH, especially if institutional investors can be enticed, resulting in ETH price growth.
ETH Price Prediction – Ethereum Primed For A 50% Upswing
The Ethereum price again retested resistance from the $1,677 level, embraced by the x-axis of the ascending triangle. On Friday, the bulls pushed ETH above the barrier above, confirming a bullish breakout from the chart pattern.
Ascending triangles are significantly bullish technical formations and feature exact breakout targets reached by measuring the distance between the highest and the lowest points. As observed from the daily chart below, the ascending trendline has been supporting the Ethereum price since June 2022. The same chart revealed the immediate support at the $1,677 level, embraced by the triangle’s horizontal line, offered the launching pad ETH needed to begin an uptrend.
As such, a daily candlestick close above the abovementioned level would clear the path for an upward spiral taking the Layer 1 token above the technical target at $2,472 to reach the $2,500 psychological level. This would represent a 49.29% climb from the current price.
ETH/USD Daily Chart
The moving averages were facing up, indicating that the market was still bullish. The Relative Strength Index (RSI) was also moving northward. The price strength at 60 reinforced the buyer’s determination to regain market control, adding credence to the bullish thesis.
On the downside, things could go awry for ETH if buyers need to be more robust to increase prices. This would strengthen the sellers who would book profits on the rally to $1,700, triggering a retracement.
In such a case, the support at $1,677 could be lost, with sellers quickly pulling the token toward the $1,350 and $1,550 demand zone, where the 50-day, 100–day and 200-day SMAs are currently sitting. This would simply be undoing all the gains posted over the last six days. Another leg lower would see a revisit of the $1,240 level, invalidating the bullish narrative.
