FX.co ★ Technical Analysis of ETH/USD for April 13, 2023

Crypto Industry News:

The Ethereum update, code-named Shanghai, took place on April 12. One of the main changes is allowing network validators to output their ETH. Many people wonder what will happen in such a situation in the short and medium term with the ETH price and the number of tokens staked. According to experts, we can expect (and note) slight fluctuations in the price of Ethereum and a temporary decrease in the number of active stakers, but over time, both the price and the sum of stakers should increase, for example from a change in the way the network works.

Compared to other leading Proof-of-Stake (PoS) chains, Ethereum falls short. The best PoS chains have around 45% of their native tokens in the staking freezer, with the only exception to this rule being Binance-owned BNB (15%, similar to Ethereum). This may be due to the fact that Binance users who hold BNB receive a 25% discount on trading fees, thus providing the token with additional utility not available on other Proof-of-Stake networks.

Given this information, it is highly likely that the amount of ETH stashed will increase in the coming weeks following the Shanghai fork. Retail holders who previously hesitated to deposit their assets for an indefinite period of time may now slowly start to do so more willingly. In addition, institutional investors who were previously unable to lock in their stakeholder capital in staking will now be able to monetize their ETH holdings, eliminating the previously existing risk.

In this context, according to analysts, the volume of stashed ETH could increase to 25%-30% within a year, making the Ethereum network more secure and reducing the amount of ETH supply available on the market.

Technical Market Outlook:

The Shanghai update is done and the ETH/USD pair has been seen testing the last swing high located at $1,940. In a case of a breakout higher, the next target for bulls is seen at the level of $2,000, but so far is more probable that a potential Double Top technical pattern was made around the last swing high. The strong and positive momentum on the H4 time frame chart support the short-term bullish outlook for Bitcoin, however, the market conditions coming off the extremely overbought levels. The level of $1,858, $1,845 and $1,832 will now act as the support for bulls, so please pay attention to this level during the local pull-back.

Weekly Pivot Points:

WR3 - $2,078

WR2 - $1,988

WR1 - $1,955

Weekly Pivot - $1,898

WS1 - $1,862

WS2 - $1,809

WS3 - $1,719

Trading Outlook:

The Ethereum market has been seen making lower highs and lower low since the swing high was made in the middle of the August 2022 at the level of $2,029. This is the key level for bulls, so it needs to be broken in order to continue the up trend. The key technical support is seen at $1,368, so as long as the market trades above this level, the outlook remains bullish.