Ether Enthusiasm Outstrips Bitcoin as Shanghai Fervor Grows
The Shanghai/Capella upgrade, due roughly in one week’s time on April 12, will finally give validators the ability to withdraw from staking
Source: Shutterstock / DUSAN ZIDAR, modified by Blockworks
Ether (ETH) is fast outpacing bitcoin (BTC) as speculation over both assets’ performance in light of a major network upgrade next week reaches fervor pitch.
ETH has outpaced the king crypto by a wide margin over the last seven days having climbed 4% to $1,876 compared to a -1.8% move for BTC as of 8:50 am ET, Thursday.
It’s the first time ether has traded this high since August of last year.
The ETH price when measured against BTC has been in an uptrend in recent days, but remains squarely in the middle of a multi-year consolidation range between about 0.052 BTC and 0.085 BTC, dating back to the Spring of 2021.
The number of ether investors considered to be on the losing side of their initial trades is now at 10-month lows, which could mark a positive signal for overall health, data analytics platform Glassnode tweeted Wednesday.
Digital assets have continued to hold ground in the face of unprecedented banking collapses across the US and inflationary headwinds that threaten to tip the country into a recession.
“The recent uptrend in pricing is a function of macroeconomics and Fed balance sheet more than it is a function of Web3 enthusiasm or related speculation,” Rich Falk-Wallace, CEO of crypto data analytics platform Arcana told Blockworks.
While the industry has enjoyed a brief shift in market sentiment toward risk-on assets following uncertainty around Silicon Valley Bank, Signature and Silvergate last month, speculation for ether remains fixed on its latest network enhancements.
The Shanghai/Capella upgrade, due roughly in one week’s time on April 12, will finally see those validators, who staked their ETH more than two years ago, able to withdraw.
While the asset could experience significant volatility in the short term, the upgrade would “ultimately prove long-term bullish,” Blockworks previously reported.
The asset has clocked renewed enthusiasm as open interest in perpetual contracts on the Bitfinex exchange tapped six-month highs of $131 million on Wednesday, Glassnode data shows. On Bybit, another exchange offering crypto derivatives, open interest for ETH hit a one-month high.
That suggests traders and investors have increased their exposure to ETH futures contracts in a move that could either be interpreted as an uptick in bullish sentiment ahead of Shanghai or reflect hedging activity among ether holders with locked stake.
Funding rates across major perpetual futures exchanges are roughly flat, however, indicating no major funding stress on either short or long positions, data from The Tie shows.
During the life of the Ethereum staking contract, from the Beacon Chain’s inception to the present, the price of ether has fluctuated in a wide range between $600 and $4000, making it hard to predict the behavior of stakers post-withdrawals, Blockworks Research has said.
Get the news in your inbox. Explore Blockworks newsletters:
- Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
- Empire: Start your morning with the top news and analysis to inform your day in crypto.
- Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
- 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
- Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
- The Drop: For crypto collectors and traders, covering apps, games, memes and more.
- Supply Shock: Tracking Bitcoin’s rise from internet plaything worth less than a penny to global phenomenon disrupting money as we know it.
