Ethereum (ETH), It rose to its highest level since August after analysts said fears of rapid cash outflows after the much-anticipated update were exaggerated.
According to researcher Flipside Crypto, 96% of withdrawal volume so far has come from users withdrawing their rewards rather than all their stakes.
Ethereum rose 5.6% to as high as $2,016 on Thursday, bringing its year-to-date gains to 67%.
Here is what cryptocurrency market participants had to say about the update and what it could mean for ETH:
FRNT Financial Inc. CEO Stephane Ouellette:
“Overall, I think this is a somewhat comforting rally with the update going well. I would like to point out that ETH continues to outperform BTC on a seven-day basis, so I can characterize the rise as a compensation with some buys on hold until post-update.
Overall, the Ethereum 2.0 update cycle has gone surprisingly well and is a huge improvement over the issues the developer community had been experiencing in the previous days.”
City Index senior financial markets analyst Fiona Cincotta said:
“ETH is performing better after the Shanghai update as the market realizes that fears regarding this major hard fork have been exaggerated.
Unstake demand was weaker than expected, with relief rally boosting gains. The fact that withdrawals are not instant and most of the staked ETH is at a loss makes withdrawals less compelling, easing selling pressure and supporting the price.
Not rushing to withdraw money and improving the liquidity table is a win-win situation. Now that it’s a thing of the past, it’s time for Ethereum to try to catch up with Bitcoin.”
Ilan Solot, co-chairman of digital assets at Marex:
“It was a classic sell the rumor, buy the truth situation. I suspect there are a lot of investors who are tactically shorting to unlock potential supply or waiting for the risk event to be behind and hoping for a bottom to buy ETH.
None of this has happened (so far). And of course, the fact that deposits are higher than withdrawals confirms this thesis.”
Will Tamplin, senior analyst at Fairlead Strategies:
“ETH debuted with a positive medium-term development on its chart last week. Following its rise, it followed an uptrend and faced resistance at the psychological threshold of $2,000. This level is a natural place for the rally to pause in the near term.
A decisive break above $2,000 on the Ethereum chart will be an added plus targeting secondary resistance near $2,400 in the coming months.”
Fadi Aboualfa, director of research at crypto custodian Copper:
“A specific belief has developed in the crypto space that investors will sell their Ethereum once they can withdraw it. The problem with this belief was that it ignored the fact that these investors who initially staked their ETH and were unable to withdraw it were loyal contributors to the network, not just some random traders trying to earn a quick 5%.”
*Not investment advice.
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