Ethereum Price Breaks Above $2K Following Successful Shapella Upgrade

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Ethereum price finally made the much-awaited trip to $2,000 after spending more than nine months below this level. This is the second psychological level ETH has cleared in less than a month on its upward journey after $1,500 was shattered on March 12. This northward move has been attributed to the Ethereum Shapella upgrade which took place on April 12.

The Shapella Hard Fork Goes Live Fuelling ETH Price

The much anticipated and publicized Ethereum Shanghai/Capella upgrade, also known as the Ether staking unlock event finally launched on the Ethereum mainnet at 10.27 pm UTC on April 12 at epoch number 194,048.

Completion of the Shapella upgrade meant that all staked ETH (stETH) that had been locked on the Beacon chain since December 2020 when ETH was below $400 was now available for withdrawal. This also meant that the withdrawn tokens would be available for sale, adding to the supply pressure in the market.

According to Ethereum block explorer beaconchai.in, a total of 12,859 Ether were unlocked in 4,333 withdrawals within the first hour of the hard fork. At the time of writing, these figures stood at 175,810 ETH tokens which have already been unlocked in over 79469 transactions.

A growing concern in the run-up to the upgrade was whether increased ETH supply translated to increased sell pressure, sending the Ethereum price southward. Some expected ETH holders with access to their unlocked tokens to sell them for profits given the price they had bought the crypto before the staking process.

Others believed that since the unlock event meant that holders would now be able to withdraw their staked ETH, that would drive many to buy and stake their Ether on the network with the knowledge that they would access it at any time.

Still, others thought it would be a non-event, leading to no substantial change in Ethereum’s price. This was the case for a moment as Ethereum was up only 1% minutes after the upgrade with negligible fluctuations as it oscillated around $1,900.

SHANGHAI UPDATE IS A NON EVENT.
YOU SHOULD ALL BE FOCUSING ON THE SAUDI UPDATE.
SAUDIS APEING 20M ON A REGISTRATION PLATE.
WHAT’S A FEW BILLION IN MARKET BUYS ON ETH AND BTC TO A SAUDI. THEY DONT CARE.
1M PER BTC ISN’T A MEME ANYMORE, THEYRE MAKING IT A REALITY.
LAMBO SZN
— Jamma Pelson (@JammaPelson1) April 12, 2023

However, around 17 hours after the upgrade, Ethereum price has provided a decisive move dispelling any doubts of an uptrend. The second largest crypto by market capitalization has resisted downward pressure and is leading the crypto market recovery with 5% gains on the day, according to data from CoinMarketCap.

Ethereum Price Trades Above $2,000 – Is $3,000 Next?

Ether’s price lifted from a four-hour Future Growth Value (FVG), extending from $1,850 to $1,800, occasioning a recovery above the $2,000 psychological level. This move will likely propel ETH to its next significant hurdle at the $3,000 psychological level.

The moving averages were facing up, an indication that the uptrend was strong. In addition, Ethereum price was trading above the major simple moving averages (SMAs), an indication that it enjoyed robust support on the downside. Demand pressure from these buyer congestion zones would propel Ether higher.

The Relative Strength Index (RSI) was moving upward within the overbought region. The price strength at 75 reinforced the buyers’ grip on Ethereum.

ETH/USD Four-Hour Chart

Ethereum Price Chart — TradingView Chart: ETH/USD

As such, a four-hour candlestick close above the $2,000 level would signal the ability of the buyers to sustain the higher levels. Ethereum price would then move to $2,200 and later $2,500 before making a run for the $3,000 psychological level.

While the upward outlook makes logical sense, the overbought conditions painted by the RSI suggested the buyers may be exhausted soon, bringing a correction into the picture, As such, a drop below the $2,000 and a reentry into the $1,800 and $1,700 support zone would spell trouble for the Ethereum price. In such a case, the smart contracts token could revisit the midpoint at $1,750 or the range low at $1,687.