Why Did Ethereum Suddenly Break Through $2,100?
Recently, while Bitcoin reclaimed the $30,000 threshold, Ethereum ($ETH)—often referred to as the "second-largest crypto" in the Taiwanese market—soared past $2,100. This marks its first breach of $2,000 since August 2022, with a staggering 10% intraday gain. Meanwhile, Bitcoin stabilized above $30,000, gradually climbing toward $31,000 with a 2.6% daily increase.
So, what’s driving Ethereum’s explosive growth? Market opinions vary, but most point to the Shanghai Upgrade as a catalyst.
The Shanghai Upgrade Explained
Following Ethereum’s transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in 2022, staked ETH remained locked until the Shanghai Upgrade enabled withdrawals. As of today, over 1 million ETH (worth ~$2.2 billion) is queued for withdrawal. However, unlocked ETH doesn’t necessarily mean immediate sell pressure.
👉 Discover how Ethereum’s upgrade is reshaping crypto markets
Reason 1: Macroeconomic Conditions Offset Sell-Off Fears
Ilya Volkov, CEO of YouHoder, notes that traders began accumulating positions post-Upgrade, prioritizing macroeconomic trends like slowing U.S. inflation. He emphasizes that unless macro conditions worsen (e.g., abrupt rate hikes), Ethereum’s upward trajectory—steady since early 2023—will likely persist.
Reason 2: Pre-Upgrade Pessimism Was Overblown
Relm Insurance’s CEO highlights that Ethereum’s rally post-Upgrade suggests withdrawals are less disruptive than feared. The ecosystem—including liquid staking projects—now enjoys renewed optimism. Daily withdrawal caps also mitigate sell pressure, with current averages at ~$224 million.
Kaiko researchers add that Ethereum’s open interest recently peaked at $5 billion before declining. Notably, spot markets have driven price action, with perpetual/spot ratios at post-Merge lows—a trend accelerated by February’s U.S. banking crisis.
FAQs
Q: Will Ethereum’s price drop due to unlocked ETH?
A: While withdrawals introduce supply, gradual release limits immediate impact. Macro trends and staking demand may counterbalance sell pressure.
Q: How does the Shanghai Upgrade benefit Ethereum?
A: It enhances network efficiency and liquidity, attracting more validators and institutional interest.
Q: Is now a good time to invest in ETH?
A: Market dynamics favor long-term holders, but always assess risk tolerance and diversification.
👉 Explore Ethereum’s latest price trends and staking opportunities