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Shapella, Shanghai, Special Edition
They didn't all withdraw
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Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, OIL, ES, and NQ as well as our favorite altcoins.
Apple lets Uniswap's wallet app out of 'jail' (The Block)
Ethereum's Shapella upgrade pushes ether price past $2,000 for first time since August (The Block)
First Mover Americas: Crypto Trading Comes to Twitter (CoinDesk)
CoinDesk Indices Unveils Bitcoin Trend Indicator (CoinDesk)
EOS Network lands $60M investment and partnership from DWF Labs (CoinTelegraph)
ERC-20 tool recovers $150M — Coinbase exec explains how (CoinTelegraph)
Bitcoin, Ether Hold Higher Post-Shanghai, but Upgrade May Not Be Driving Markets (Blockworks)
LSEG-owned Clearing House To Offer Bitcoin Index Derivatives Service (Blockworks)
Asia Could Dominate 80% of Web3 Gaming: Report (Decrypt)
Older Version of DeFi Yield Aggregator Yearn Finance Exploited for $11.6M (Decrypt)
We are taking a break from our usual programming to bring you a special edition ETH Outlook. Normally, we focus on Bitcoin here because it is the number one crypto by marketcap and tends to lead the pack. It’s rare to see other coins rising if Bitcoin is not also going up. But… alas, yesterday was a special day for the Ethereum focused investor and community at large. The Shanghai or Shapella upgrade are now complete.
Honestly, I couldn’t be bothered to google “Shanghai vs Shapella”. I had never heard the term Shapella until yesterday, but my understanding is from a layman’s perspective they are essentially the same thing. It doesn’t matter what we call it, what happened?
The Ethereum network underwent an upgrade which allowed ETH stakers to withdraw for the first time since staking went live. If you don’t know, Ethereum switched to a Proof-Of-Stake (POS) mechanism last year that requires those validating the network to stake 32 ETH to “prove” their stake in protecting the network. When this staking originally went live there was no ability to unstake. Well, as of last night the unstaking was unlocked and withdrawals began:
You can track the behavior or deposits versus withdrawals yourself here: Nansen Ethereum Shanghai Metrics
It is my personal opinion that many traders will be watching this data in the coming days to form their bullish or bearish views on the Ethereum price. As you can see there were a horde of withdrawals last evening, but this morning some large entity staked over 20,000+ ETH. Since then the price has risen to $2000 and is currently hovering near that level.
The ETH/USD chart is uninteresting as Bitcoin is going up and bringing all crypto up with it. What really matters is how the Shanghai (Shapella) upgrade has impacted ETH’s performance against BTC. If you have been signed up for our premium membership you will know this chart well as we have been tracking it closely since the beginning of ETH’s underperformance early this year.
As you can see above, the anticipation of the upgrade has sent ETH into a megaphone pattern against BTC. This means the price has a slight average uptrend but with ever increasing volatility. One should expect high percentage price swings between this pair in the coming weeks as investors and traders digest the results of the Shanghai (Shapella) upgrade on the market.
If ETH really wants to become the leader in a sustained bull rally it needs to reclaim the ETH/BTC yearly opening price around 0.073, this is the level to watch.
Join us in discord where we will continue to monitor ETH’s price action in response to the Shanghai (Shapella) upgrade.
Possible Course of Action
HODL if long spot
Do nothing and wait for ETH/BTC to retest the neckline of summer 2022 breakout (0.65)
Short near 0.07 ETH/BTC (top of megaphone) expecting a retest of the neckline of summer 2022 breakout
Get long on a breakout of the megaphone pattern (price rises above 0.07 and holds as support)
The Bulls’ Defense:
Upgrade successful with no network errors
New deposits coming in to nearly match withdraws
The Bears’ Prosecution:
Price rejected $2000
ETH/BTC pair still in megaphone pattern with weak uptrend
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