The Ethereum price rally is on an upward trajectory since the last fortnight. Performing a little over Bitcoin’s growth, Ethereum gained 30%. On the morning of 16th January, Ethereum woke up to exciting news as Ethereum is riding high on the $1600 market price.
This comes after several contributory factors play a role in the price increase. From the accumulation of assets, particularly by Shark Addresses, it crossed above $1400 for the first time since 7th November on 12th January.
Shark Addresses are also the highest in this period, with Santiment observing 3000 new Shark Addresses, taking the total tally to the highest since February 2021.
Ethereum Bullish Momentum Before The Shanghai Upgrade
Ethereum is two months away from the Shanghai Upgrade, and the prices have surged to the highest in ten weeks. After this upgrade, Ethereum will implement EIP Proposal 4895, enabling consensus layer withdrawals.
Following the Shanghai Upgrade, the users can withdraw staked ETH tokens on the Beacon chain for over 2 years. This upgrade is going to streamline the ETH withdrawal and will improve the exit process.
This upgrade is going to benefit ETH liquid staking platforms. Simply put, liquid staking is locking up funds to generate rewards. However, in this, the users can still access their locked funds. Given the fact that with the upgrade, the users can withdraw their staked amounts, subject to the correct exit process, which will be an attractive factor.
Lido is one of the platforms allowing liquid staking, and its performance is great. The amount of ETH staked on Lido crosses a cumulative value of $22.5 billion. Crypto experts believe that after the new upgrade, ETH will be staked to leverage better yield opportunities.
More Ethereum Is Burning Than Produced
Ethereum’s performance in 2022 was not good. However, come 2023, the ETH holders are in a celebratory mood as the coin’s price increases amidst a deflationary trend. As the on-chain fundamentals strengthen ETH issue goes into a deflationary mood as the current supply growth reduces by -0.10%, according to the latest trends by Ultrasound Money.
According to the same source, 732,000 ETH was burned, and 622,000 ETH was issued. The overall trend in the market is still bearish, but seeing the current upward trend in ETH and its price increase, the market is expected to take a bullish turn. Moreover, with the gas price increase, the burn rate will increase further.
Consequently, the higher deflation rate will lead to a shrinking supply. As compared to Bitcoin, Ethereum has a higher value settlement. This is an interesting trend for the future as ETH holders stand to gain more than BTC holders in the future when the contracts mature.
Observing the growth in ETH, the loss of momentum in the crypto market facilitated by the FTX crash is coming back. Moreover, across the crypto market, trends are rising with an overall gain of 1.3%, totalling a value of $1.3 trillion.
Featured image from Kanchanara / Unsplash, Chart from TradingView.com