Ether, the second-largest cryptocurrency by market capitalization, has surpassed the $1,900 mark for the first time in eight months, as reported by CoinMarketCap.
This price surge comes just a week before Ethereum is set to experience a major update with the Shapella hard fork, which will enable staking withdrawals and could potentially impact the market.
The cryptocurrency reached a 24-hour high of $1,915, a price not seen since August. Although Ether has retraced some of its gains since its morning peak, it remains up around 3% in the past day.
The last instance of Ether reaching over $1,900 was on August 16, 2022, during a broad crypto sell-off triggered by the United States Federal Reserve’s aggressive interest rate hikes aimed at combating inflation.
The recent increase in Ether’s price could be a result of expectations that the Fed may ease its quantitative tightening measures or due to a rise in demand for Ether in light of the upcoming more flexible staking options.
Scheduled for April 12, the Shanghai hard fork, commonly known as “Shapella”, will implement EIP-4895, and will finalize Ethereum’s complete transition from a proof-of-work (PoW) to a proof-of-stake (PoS) network.
This pivotal event will allow users to withdraw their staked ETH from the Beacon chain, for the first time since the previous Merge upgrade took place in September.
https://twitter.com/TimBeiko/status/1640722906744487936
Despite the uncertain macroeconomic environment caused by the Federal Reserve’s interest rate hikes and a series of high-profile bank failures, cryptocurrency markets have experienced a significant uptrend. Over the past three months, Bitcoin and Ethereum have surged by 67% and 49%, respectively.
As the price of Ether continues to climb, the ETH/BTC trading pair has also experienced growth, increasing by nearly 3% over the past week, according to TradingView data.
Solid bounce for ETH relative to BTC the past several days
tbh though, still just expect this as nothing more than a swing play opportunity and profits should rotate back into BTC before $30K breaks and the ratio trend reverses bearish again pic.twitter.com/MOe1GlibaX
— K A L E O (@CryptoKaleo) April 5, 2023
This indicates that a combination of factors, such as potential changes in the Fed’s policy and heightened demand for Ether, might be contributing to the cryptocurrency’s price increase.
Moreover, the seamless upgrades and reliable execution of Ethereum’s development roadmap have strengthened investor confidence and attracted the attention of institutional investors.
It is important to note that Ether’s price experienced a significant drop following the execution of The Merge on September 15, 2022, losing almost 25% of its value within a week, as per CoinMarketCap.
While some analysts and traders suggest that the impending unlocking of staked Ether could generate selling pressure in the market, the actual effects of the Shapella hard fork remain speculative at this point.
