Ethereum (ETH) has finally broken through the resistance level of $1,900 after struggling for the past week, and this has set a bullish trend for the cryptocurrency. The question on everyone’s mind is, what’s driving the surge in price?
The Role of Ethereum Sharks in Boosting the Price
According to Santiment, the recent rally in the price of Ethereum may have been driven by Ethereum shark addresses. These are accounts that hold between 100-10,000 ETH coins and have been accumulating them at an accelerated rate over the last nine months. These shark addresses have added 2.27 million coins to their holdings, worth $4.2 billion, pushing their holdings to a new one-year high. This accumulation trend can have bullish implications for any digital asset and could be the case for ETH. As their holdings increased, the price of ETH broke above $1,900, a new nine-month high for the cryptocurrency.
Anticipation of the Upcoming Shapella Upgrade
Apart from the sharks accumulating ETH, another reason for the surge in price could be the anticipation of the upcoming Shapella upgrade. This upgrade will enable stakers on the Ethereum network to withdraw their staked ETH, which has been impossible since the Beacon Chain was launched. However, the upgrade could be a “buy the rumor, sell the news” event, since more ETH will be coming back into circulation, and some of these coins are expected to find their way to exchanges as stakers try to take profits.
Sell Pressure from Coins Entering the Market
While some of the coins will leave their ETH staked as they wait for better prices, those that make it to exchanges will provide sell pressure for the asset, leading to a decrease in price. Investors may also secure profits from their assets, leading to a drop in price, as seen with the Cardano Alonzo upgrade.
Despite the potential sell pressure, ETH is still seeing a good upside at the time of this writing, changing hands at $1,910.
Conclusion
The surge in the price of Ethereum has been attributed to the accumulation of ETH by Ethereum shark addresses, as well as the anticipation of the upcoming Shapella upgrade. While this surge is welcome news for investors, the increased supply of ETH due to stakers being able to withdraw their coins may lead to a drop in price. Nevertheless, ETH is still enjoying a good upside and has broken through the $1,900 resistance level.
