Ether Price Swings Upward After Ethereum Upgrade, but What About the Future?

The price increase addresses the question of whether ether would rise or fall following the completion of the hard fork.

AccessTimeIconApr 13, 2023 at 10:02 p.m. UTC

Shapella’s arrival as the final leg in the Ethereum network’s transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus answered the question of whether the event would be bearish for ether (ETH) with an emphatic NO.

Ether was recently trading over $2,000, up nearly 6% and its highest level since August.

“Shapella,” represents the upgrade that occurred on both Ethereum’s execution (Shanghai) and consensus (Capella) layers, ultimately allowing stakers of ETH to withdraw their staked deposits.

The question for many investors was whether Shapella would lead to a rush from or to the Ethereum network, with bulls and bears standing on opposite sides of a double swinging door.

The bulls had the upper hand on Thursday because the prospect of additional liquidity while earning staking rewards trumped the desire to take immediate profits and run. Approximately 18.3 million ETH representing $36 billion, or 15% of ether’s total market capitalization, is currently staked.

Approximately 1.1 million in ETH rewards have accrued, which could represent an active amount that investors would be motivated to un-stake with the profits either sold or re-staked.

The former would lead to a price drop, while the latter would likely be supportive. Thus far, net deposits over the last 24 hours have declined by 79,000 ETH, with new ETH deposits outpacing the 172K ETH withdrawn. Additionally, 68,000 in partial withdrawals have occurred, approximately 6% of eligible rewards.

ETH’s Relative Strength Index (RSI),a measure of price momentum, has risen to 69, its highest level since January.

Ether 04/13/23 (TradingView)
Ether 04/13/23 (TradingView)

Not surprisingly, the ETH/BTC rose on Thursday, as ether was up 3% versus 0.17% for bitcoin.

Investors may want to continue to watch the direction of ETH deposits. Since January 2021 the trajectory of ether deposited into ETH staking contracts has steadily risen, a direction that suggests the asset is gaining, not losing, favor.

Over the upcoming weeks and months, this metric will likely flatten as investors who must un-stake ETH begin the process of doing so. But for those who want to stake, Shapella’s completion signals reduced risk, increased liquidity and and uptick in asset value.

ETH 2.0 Deposits (Glassnode)
ETH 2.0 Deposits (Glassnode)

Edited by James Rubin.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX