The rally in the price of Ethereum (ETH) could end abruptly in the coming days, to put an end to the trend that led it to achieve a 35% rise since last January 1.
While several analysts predict that bitcoin (BTC) could rise to $30,000 by mid-February, other experts agree that Ethereum will lose up to 60% of its current value ($1,603) to plummet near the $600 level.
Through a video on his YouTube channel, trader Benjamin Cowen said that ETH has “a tough few days ahead,” in which it is “likely” to “break lower.”
“A sustained bull market for Ethereum will not occur until ETH spends some time in its home base. I understand that we have been flirting with that level for a while, but to my surprise and to Ethereum’s credit, it has remained much more resilient than I thought it would be,” he asserted.
Cowen estimated that the drop would take Ethereum to levels between $800 and $600.
What could Ethereum’s fall cause?
The arrival of the next update on the Ethereum network, Shanghai, will open up the possibility for investors to withdraw their ETH deposited in staking within the blockchain, along with the rewards they have generated for engaging in this activity.
Withdrawals of ethers from validators are one of the most anticipated features on the blockchain, due to the fact that they have been blocked on the network since the launch of Beacon Chain in December 2020.
The arrival of these withdrawals is raising new concerns among investors, who consider the possibility of massive withdrawals of ETH by validators occurring and causing serious problems in the operation of the network, as well as a large increase in the supply of the cryptocurrency, which would derive in a collapse in its price.
Shanghai is scheduled to be launched between May and June this year.
Crypto analyst Jack Niewold mentioned on Twitter that around 14% of the total ETH supply is in staking and all those tokens could be withdrawn after the aforementioned update.
“This makes some people bearish. But that ETH doesn’t go to market right away: it still has to go through a withdrawal queue. It takes time to unlink,” he added.
Ethereum’s Shanghai Fork is coming.
If you hold ETH, here's what you need to know, explained simply.
— Jack Niewold (@JackNiewold) January 26, 2023
And if all goes well for the price of ETH?
It’s not all bad news for Ethereum. Other analysts, such as Kaleo, are confident that the leading altcoin could rise as high as $1,660 in the coming days.
Prepare to resume send pic.twitter.com/BtG8w0EVv8
— K A L E O (@CryptoKaleo) January 26, 2023
Meanwhile, expert Satoshi Flipper assured that Ethereum’s charts are showing a bullish pennant and could explode in price against bitcoin.
Haven't looked at the ETH/BTC chart in a long time, but this is wild: this is the weekly time frame and $ETH has been coiling (minus the deviation) in a bullish pennant for 1.5 years now, since MAY 2021 👀👀
Can $ETH finally break out against $BTC? pic.twitter.com/Mtm0xE3Wqp
— Satoshi Flipper (@SatoshiFlipper) January 26, 2023
What is certain is that if Ethereum manages to resist the large number of withdrawals that could come along with Shanghai, the altcoin will likely begin a sustained upward path, as predicted by analyst Coin Bureau on his YouTube channel.
Bureau said that when investors see that ETH can “stop getting staked and sold easily, then they will be incentivized to do more staking.”
This analyst believes ETH could go “either way,” but he would not be surprised if it is “slightly bearish in the near term” and sees some selling.
“I think the future for ETH is so, so bright, and I think Shanghai, assuming it goes as smoothly as The Merge did, then I think 2023 could be a great year for Ethereum and ETH,” he stressed.
At the time of writing (19:34 UTC), Ethereum was trading at $1,605, up 0.65% in the last 24 hours.
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