© Reuters
Investing.com – This week will be particularly important for , as the next major network update, the Shanghai hard fork, is scheduled for Tuesday, February 28.
However, experts are divided on the potential impact of this major new evolution of the network of ETH, the second largest cryptocurrency in the world by capitalization.
Reminders on Ethereum staking to understand the issues of Shanghai
Let us first recall that Ethereum migrated from a Proof of Work (PoW) system to a Proof of Stake (PoS) system in September 2022, with the Merge update. As PoS networks rely on staking and not mining for network security, Merge has also introduced staking on the Ethereum network.
Unlike the mining of PoW networks, which requires state-of-the-art computer equipment to secure transactions by solving complex equations, staking consists of “blocking” a certain quantity of cryptocurrencies to become a “validator” of the network, and receive remuneration. in exchange.
However, although it is possible to stake ETH from Merge, investors cannot for the moment withdraw their staked ETH, nor the accumulated validation income, which was planned in the roadmap.
What are the risks facing the Shanghai Ethereum update?
The Shanghai update expected this week corrects this, by introducing the possibility of withdrawing staked ETH. And the stakes are high.
Indeed, several experts fear that Shanghai will lead to massive withdrawals of staked Ethereum from investors in a hurry to collect their profits. This sudden increase in supply could drive the price down.
On the other hand, we can also estimate that Shanghai will increase the demand for Ethereum, from investors for whom the impossibility of withdrawing staked ETH had kept them away from this activity. The fact that staked ETH will now be more “liquid” thanks to Shanghai will remove this objection, and could boost demand.
The chart context for ETH/USD is uncertain
Uncertainty is therefore high regarding the potential direction of Ethereum this week and the chart context does not allow to see more clearly.
Indeed, ETH/USD has been hitting the $1700 resistance zone since the beginning of the month, and it seems that this resistance will be difficult to break without the support of a key catalyst.
Above $1700, $1800 will be the next target. Then, few concrete obstacles will stand in the way of Ethereum before the $2000/2030 zone.
On the downside, last week’s low near $1560, the key threshold at $1500 and the February 13 low at $1465 are the first potential supports to consider.