Bitcoin, Ether Hold Higher Post-Shanghai, but Upgrade May Not Be Driving Markets

While some analysts anticipated Wednesday’s Ethereum upgrade would result in a short-term sell-off, the price held steady


Noman Zahid Rafi/Shutterstock modified by Blockworks


Crypto rallied Thursday morning in New York on the heels of the highly anticipated Shapella upgrade, which completed Wednesday evening. 

Ether (ETH) was trading around 4% higher as of 10:00 am ET, holding near the $2,000 level, according to data compiled by Blockworks Research

Bitcoin (BTC) similarly was holding steady, trading at around $30,200. Bitcoin has teetered around the $30,000 since it broke past the resistance level Tuesday, reaching highs not seen for close to a year. 

Wednesday’s Ethereum upgrade made 18 million ether staked on the blockchain available to be gradually withdrawn, and some analysts anticipated that would result in a sell-off. But, with very little actual demand to withdraw — far below the maximum allowable by the protocol — the price held steady.

Read more: Sell Pressure on ETH After Shanghai? Many Not Worried

Ether started to rally until around 3 am ET, hours after the upgrade was finalized, suggesting Shapella may not be the driving force behind the jump. 

“While this may look like a delayed Shapella reaction, it isn’t, at least not directly,” Noelle Acheson, author of Crypto is Macro Now and former head of market insights at Genesis, said. “A similar jump in BTC suggests that the ETH move is more a liquidity and a relief play.”

Still, regardless of the catalyst, Thursday’s market moves show the Shapella upgrade may not be as consequential as previously thought, analysts say. 

“Ethereum surged when many were anticipating a big sell-off. There also wasn’t the panic in terms of selling that many had anticipated, at least not as the upgrade kicked off, and this suggests to me that the unlocks might not be as dramatic as many had been predicting,” said Joe Ziolkowski, CEO and co-founder of digital asset insurer Relm Insurance. 

“It’s still early in the process, but the momentum across the ecosystem presents a very optimistic picture for ETH as well as various liquid-staking protocols,” Ziolkowski added. 

Close to 300 withdrawals were processed in the half hour after the Shapella upgrade was finalized, on-chain data shows. 

In terms of what to anticipate in the coming days, analysts say macroeconomic pressures and continued fallout from the banking crisis will continue to move markets. Equities were edging higher during pre-market trading Thursday, with the S&P 500 and Nasdaq Composite indexes up 0.4% and 0.6%, respectively. 

Researchers from crypto data provider Kaiko say traders should keep an eye on the perpetual futures spot ratio. Perpetual futures open interest hit close to $5 billion earlier this month before dropping off. 

“Overall, ETH markets have been heavily spot-driven over the past month, as measured by the perpetual futures to spot ratio, which hit its lowest level since the Merge,” Kaiko analysts wrote in a recent note. “This is an interesting turnaround, especially considering the ratio had surged to nearly double pre-Merge levels at the start of the year amid a broad crypto rally. The ratio has been on a consistent downtrend since late February as the banking crisis and BTC rally continue to dominate market movements.”

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