The Ethereum price has risen by 4.5% in the past 24 hours, with its surge to $1,669 happening as the cryptocurrency market recovers from its weekend selloff.
Its current price means that it has risen by 6.5% in a week and by 8% in the last 30 days, with the altcoin also up by 39.5% since the start of 2023.
And with ETH being possibly the most fundamentally sound coin in the market, it has every chance of enjoying further gains as the year progresses.
Indeed, with the upcoming Shanghai upgrade and with the coin becoming deflationary post-Merge, there could be a rush into it in the coming months.
ETH’s chart is painting a bullish picture at the moment, with its relative strength index (purple) jumping up to 60, having been at an oversold 30 a few days ago.
In addition, the coin’s 30-day moving average (red) has begun rising further above its 200-day (blue), indicating the emergence of a new bullish trend.
Of course, it’s not clear for how long such a trend may last, although if ETH can break through the $1,700 resistance level, things may continue a little while longer.
There’s a good chance of this happening, given what Ethereum has on the horizon.
As noted above, it’s currently awaiting the Shanghai upgrade, which is due at the end of this month, or early April.
Shanghai will enable the withdrawal of staked ETH.
While some have argued that the update will result in a surge of selling pressure, others have suggested that the long-term effect will be to attract more institutions to the Ethereum ecosystem.
The ability to withdraw staked ETH will ultimately be a positive for the coin, since it de-risks staking for users, assuring them that their funds can be easily withdrawn.
At the same time, Shanghai also provides the technical underpinnings for future Ethereum upgrades, including sharding, which will provide massive scalability improvements when it goes live (most likely next year).
This is already bullish enough for ETH as it is, yet there are other reasons to be optimistic about the altcoin’s prospects.
For one, the coin has become deflationary since last September’s Merge, in combination with the earlier EIP 1559 upgrade (which results in the burning of fees).
Indeed, ETH now has a tendency to become deflationary during peak periods of traffic in that it often burns more tokens than it generates.
This strengthens the bull case for ETH, yet so does recent adoption news.
Most notably, Coinbase announced last month that it’s launching its own layer-two sidechain for Ethereum, dubbed Base.
What’s significant about this is that Coinbase is aiming to use Base to “onboard 1B+ users into the cryptoeconomy.” In other words, it’s aiming to onboard 1B+ users into the Ethereum economy.
This can only increase Ethereum and ETH usage over time, amplifying the deflationary effects mentioned above, as well as increasing demand for ETH more generally.
Other positive news for Ethereum includes February’s announcement from Visa that it’s testing USDC stablecoin payments on the Ethereum blockchain.
Taken with the Coinbase news, this suggests that most big firms will end up opting for Ethereum if they decide to use a public, permissionless blockchain.
As such, the market can expect ETH to rise steadily over the course of the year, even if the next month or so may be rocky due to the unfolding banking crisis.
Still, once ETH passes $1,700, it could end up reaching $2,000 by the second half of the year before potentially rising to $2,500 by the start of 2024.
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