- Ethereum’s Shanghai upgrade’s public testnet will go live in February 2023, a month before its mainnet deployment.
- Analysts say the hype around the Shanghai event, like The Merge, could pump ETH price.
- Ethereum will target the $1,631 range high after the price breaks above the triangle’s resistance line at $1,515.
Ethereum’s (ETH) price is back above $1,300 after it overcame the resistance hurdle at $1,250 on January 4. The price has rallied 10% in the last two weeks with no signs of stopping, and now the intelligent contract token is approaching the $1,400 hurdle.
At the time of writing, the ETH price is trading at $1,332 after gaining 6% in the last 24 hours. The second largest crypto is recording a live market cap of $163.5 billion and a 24-hour trading volume of $5.5 billion, according to data from CoinMarketCap.
The current rally that the ETH price displays do not come as a surprise and points to investors making large bets on Ethereum. Among the reasons for investors’ bullishness on the leading altcoin is the use of the newer Ethereum 2.0 network and the developer’s plans for the public Shanghai testnet.
Ethereum’s Shanghai Testnet
In a recent revelation by Christine Kim, the research associate working at the financial services and investment management firm Galaxy Digital said that the Shanghai upgrade’s public testnet will go live in February 2023, a month before its mainnet deployment. Kim is privy to this information, given her history of participating in the inaugural All Core Developers Call (ACDC) for 2023, which was when Ethereum developers made this decision.
Based on Kim’s report, the upgrade will prioritize the function where users can withdraw staked ETH. Based on this standpoint, the developers are eliminating any proposed code modifications that may result in the slipping of the time objective.
Kim also disclosed that Ethereum developers resolved to cancel any Ethereum Improvement Proposals (EIPs) related to EOF. EOF is short for EVM (Ethereum Virtual Machine) Object Format.
The release of staked ETH due to the Shanghai upgrade will affect the ETH market, causing it to experience extreme price volatility. Nevertheless, ETH stakers could withdraw the tokens and rewards they have staked.
Since the 2020 launch of the PoS Beacon chain, some stakers have been unable to access their tokens, but the Shanghai upgrade will change that. As it stands, almost $20 billion is invested in around 15 million ETH, and as stakeholders may be open to selling their tokens, selling pressure may increase, causing a price dip.
Other analysts have opined that the hype around the Shanghai event, like The Merge, could pump ETH price. To support their argument, the analysts say making staked ETH withdrawals possible will, in time, attract more participants to stake ETH for interest. According to them, these participants would include individual investors and institutions alike.
Ethereum Price Analysis As ETH Targets the $1,631 Range High
ETH was trading at $1,332 on the daily chart with a positive bias, despite bears trying to cut back some of the ground that ETH price gained during the New Year relief rally. The daily chart reiterated the increasing volatility in Ethereum price as an ascending triangle appeared on the chart, as shown below.
The 50-day simple moving average (SMA) and the Relative Strength Index (RSI) were both tipping upwards, validating the bullish thesis. The Moving Average Convergence Divergence (MACD) indicator was also moving upwards, breaching the neutral line, suggesting that more buyers were coming into the ETH market.
Therefore, the ETH price was poised to increase, with traders being advised to remain patient and composed lest they trigger a sell-off that may send the ETH price toward the range lows past the lower boundary of the ascending triangle.
ETH/USD Daily Chart
The daily chart (above) showed that ETH traded inside an ascending triangle, a highly bullish technical formation. The pattern predicts a 22.45% breakout upward to the $1,631 level once the ETH price breaks above the triangle’s resistance line at $1,351.
Nevertheless, before achieving this target, ETH bulls must fight supplier congestion offered by the 200-day SMA $1,400 psychological level, and the support level turned resistance at $1,515.
On the downside, the $1,300 level, where the 100-day SMA lies, provided immediate support for the Ethereum price. Bulls can hold above this level and can amass strength to push ETH upwards.
Conversely, the ETH price could continue flashing red if the 100-day support is lost. Such a move would initiate a rally to the downside, with the following line of defense emerging from the $1,230 level, where the lower trendline of the ascending triangle and the 50-day SMA (yellow) appeared to merge. Below that, the ETH price could drop towards the $1,168 support floors or the $1,074 swing low, indicating a 19% drop from the current levels.