Ethereum (ETH) Price Analysis: Traders in a Tug of War Ahead of the March Upgrade

Current ETH Price Trends

The price of Ether (ETH) has been playing hard to get, consolidating in a tight range between $1,600 and $1,700 since February 15. It feels like a game of tug-of-war where both sides are pulling, but nobody can seem to make a decisive move. The tension among traders has been palpable, and with March just around the corner, the stakes are getting higher.

The Shanghai Upgrade and Its Implications

Anticipation is building around the much-awaited Shanghai upgrade, set to launch in March. This upgrade will allow stakers—those who’ve been putting their ETH to work—to withdraw their coins from the Ethereum proof-of-stake (PoS) smart contract. Several analysts have raised concerns that this newfound freedom for stakers could trigger a wave of selling. And let’s be honest, who doesn’t love a good sell-off?

ETH’s Supply and Market Dynamics

Since the introduction of the PoS contract in December 2020, investors have staked over 17.4 million ETH, which is roughly around $28.35 billion at current prices. With this large pool of staked Ethereums, traders are concerned that when the upgrade hits, we might see stakers pulling out their coins like kids pulling off the lids of ice cream containers at a party.

Resistance Levels to Watch

Getting technical here: ETH has been struggling to break through the $1,650 to $1,700 range. The chart resembles a recurring nightmare for bulls. Every time it tries to flip this range into support, back it goes, culminating in a strong pullback toward a multi-month ascending trendline.

Potential Price Correction

If past patterns hold true, there’s a chance ETH could correct by about 25% down to $1,250. Think of it like a well-timed rollercoaster ride—up and eventually, down you go! However, if ETH can finally break through the resistance, the next target could catapult it toward the $1,925 to $2,000 range.

Future Selloffs: Not So Fast

Interestingly, an in-depth look at on-chain data suggests that vast sell-offs might be less likely. The amount of ETH sitting on exchanges has dramatically dropped from around 30% to just 11% since September 2022. This shift indicates that traders are opting for self-custody instead of leaving their tokens out in the open like wandering sheep.

Staking Statistics

According to CryptoQuant, 60% of staked ETH, or around 10.3 million ETH, is currently at a loss. Ouch! This means that many stakers are unlikely to sell in a frenzy anytime soon. Often, selling pressure arises when people are swimming in profits—something that just isn’t the case with staked ETH right now.

“Typically, selling pressure arises when participants have extreme profits. This is not the case for staked ETH currently,” – CryptoQuant.

The Bottom Line

As March approaches, ETH traders find themselves at a crossroads. Do they hold onto their investments and ride the wave, or prepare for potential dips in the coming days? Whatever the case, it’s crucial to do your research before diving headfirst into the exciting, yet unpredictable, world of cryptocurrency trading.