Traders Warn of ETH Price Volatility and Profit Opportunity After Shapella

Ethereum Testnet
Key facts:
  • Analyst Crypto Rand believes that there will be selling pressure on ETH from non-stakers.
  • Trader Juan Rodríguez revealed that, with Shapella, he would invest downward in the ETH market.

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Various market analysts stated that ether (ETH), Ethereum’s cryptocurrency, could present high price volatility and, therefore, an opportunity to make money. This after one of the most anticipated events in the ecosystem: Shapella. 

Shapella is the name by which Shanghai and Capella are called, the two updates that Ethereum will have today, April 12, at approximately 22:27 (UTC). As reported by CriptoNoticias, this event will allow the withdrawal of staking funds, which are around 18 million ETH .  

Given this fact, the analyst who identifies himself on social networks as Crypto Rand pointed out this morning that “a large amount” of staking is in the loss. In fact, it’s the majority, 52%, according to data from the CryptoQuant explorer. But, the rest is in profit, so they could decide to sell their ETH, generating bearish pressure on the market, the specialist estimated. 

In any case, Crypto Rand highlighted that it is estimated that the output of ETH in staking and the withdrawal period can take between 27 hours and 36 days. Therefore, the action that staked ETH holders will take will not necessarily be immediate, nor will its effect on the market.  

“Unlocking will almost certainly cause some price volatility as investor sentiment plays its part,” he said. Seeing this, he believes that even if most stakers are not selling their ETH, “there will be some selling pressure from non-stakers in the coming weeks, but this will be phased.”  

The specialist explained that the turmoil in the market is already being evidenced with the ETH trading volume in the last 48 hours. He explained that this was USD 10 billion. And he added that we could be seeing price volatility not only because of Shapella, but also because of the US inflation report. 

ETH Trader Reveals He Will Invest Down  

Given this context, trader Juan Rodríguez commented that if ETH rises close to USD 2,000, it is likely that those who have staked since it was around or less than USD 1,000 will decide to sell at least part of their holdings. “Therefore, in the next few days, we may experience downward pressure on the ether price,” he said. 

In addition, Juan Rodríguez emphasized that the first ETH was staked on the Binance and Kraken exchanges in 2020 and 2021 when its price was below USD 1,000. Therefore, he emphasized that it would be “easy” for those owners to sell them on the same platforms once they are unlocked. 

He added that if markets react negatively to US inflation, then “ETH’s price may correct significantly.” Taking this whole scenario into account, he revealed that he would short ETH through futures. 

Caution is also advised 

From different eyes, Crypto trader Tony imagines that “price action will continue to be volatile today” against Shapella. Therefore, cautiously, he advised investors to wait if “a safe entry” into the markets cannot be found. 

In an attempt to be cautious as well, trader CanteringClarck suggested that it is better to stop trying to predict whether ETH will fall or rise after Shapella. For him, it is convenient that investors give up “not being the first in line in exchange for much more certainty.” In that sense, he advises you to “react” after you see the price direction

In the long term, CanteringClarck was confident that “those large entities that have passively sold BTC and ETH recently in this retest will end up being buyers once again if we can sustain the July 2021 lows and the indices break out of their nearly one-year range.” ”. 

In this context, other ETH analysts reported by Market Times have estimated a short-term bearish and long-term bullish projection.