Ethereum Breaches $2,100 Following Shapella Upgrade

Ethereum has breached the $2,000 barrier on the heels of the Shapella upgrade, the first major network upgrade since 2022’s Merge. The second-largest cryptocurrency is currently trading at $2,114, up 6.71% on the day and 13.96% over 7 days, outperforming Bitcoin which is up 2% over the past 24 hours and is now changing hands at $30,839.

The Shapella upgrade, a portmanteau of Shanghai and Capella, is the final part of the Ethereum blockchain’s transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus. The upgrade affected the network’s execution (Shanghai) and consensus (Capella) layers, allowing ETH stakers to finally withdraw their staked deposits.

Prior to the upgrade, investors were curious as to whether Shapella would lead to more or less usage of the network. The bulls ended up prevailing on Thursday as the possibility of additional liquidity while earning staking rewards took precedence over taking profits.

Analyst Colin Wu reported that close to 240,000 ETH had been withdrawn 30 hours after the upgrade with about 100,000 ETH having been deposited, placing the net staking balance at -139,000 (then valued at $277 million). Around 1.07 million ETH ( roughly $2.26 billion) was pending withdrawal, 63% of that was from Kraken according to Wu. Kraken had its staking services suspended by the US Securities and Exchange Commission (SEC) in February. Wu added that Coinbase accounted for 11% of the pending ETH withdrawal while Huobi accounted for 5.1%.

According to Token Unlocks, about 1.11 million ETH valued at around $2.35 billion is currently pending withdrawal. Net staking balance is at -158,570.

Gemini co-founder Cameron Winklevoss commented on the upgrade, calling it “an incredible milestone” for Ethereum.

Shanghai/Capella is an incredible milestone for the Ethereum network. Despite the media FUD and regulatory attack, the brightest minds continue to build cutting edge technology that will decentralize power structures and create a more accessible financial system for all.…

— Cameron Winklevoss (@cameron) April 13, 2023

Meanwhile, online chatter about Shapella and the subsequent price gain has increased over the hours. According to LunarCrush, as of April 13, 2023, at 7:08 p.m. UTC, when Ethereum was trading at $2,016.77, it had 79,287 social mentions with 548.02 million total social engagements.

Technical analyst and trader Crypto Faibik believes that alt season has officially begun. Pointing to Bitcoin’s stay above $30,000 and Ether’s return above the $2,000 level, Facebook notes a bearish divergence in Bitcoin’s dominance chart which could lead to an altcoin rally.

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