Blockchain technology has been gaining a lot of attention and interest lately, and for good reason. It has the potential to revolutionize the way we do business, store data, and more. One of the most important developments in the blockchain space is the Ethereum Shanghai upgrade, which is set to take place in July 2022.
The Ethereum Shanghai upgrade is a major step forward for the Ethereum network and its users. It will bring a range of new features and improvements, including the ability to stake Ether and earn rewards, improved scalability, and increased security. These features are expected to make the Ethereum network more attractive to developers and users, which could lead to increased adoption and usage.
Of course, any major development in the blockchain space is likely to have an impact on price action. The Ethereum Shanghai upgrade is no different. Already, Ether supplies on exchanges have started to plunge as investors choose to move their assets to self-custody. This indicates that traders may be expecting a spike in price leading up to the upgrade.
The previous Ethereum upgrade, the Merge, also had a positive effect on price action. ETH prices skyrocketed from around $1,000 in July 2022 to over $2,000 in August and reached about $1,800 just around the time of the Merge. This suggests that the Shanghai upgrade could lead to similar price movements.
However, short-term traders should also be aware of the potential downside risks to the price of Ether. After the Merge upgrade, Ether prices fell back down to around $1,400. This could happen again after the Shanghai upgrade, as users who have been unable to withdraw their staked Ether for over two years will have access to do so right after the upgrade. This could lead to an increase in supply and a decrease in price.
It is important to note, however, that Ether withdrawals will only be available in small chunks. This means that the potential downside risk to Ether prices may be mitigated. Additionally, the demand for Ether could also increase due to the new features and improvements that the upgrade will bring.
Overall, it is clear that the Ethereum Shanghai upgrade will have an impact on Ether prices. While there is potential for a price spike leading up to the upgrade, there is also the risk of a price drop afterwards due to increased supply. However, the risk of a major price drop could be mitigated by the fact that Ether withdrawals will be available in small chunks. Ultimately, traders should be aware of both the potential upside and downside risks associated with the Ethereum Shanghai upgrade.