Steady Prices for Bitcoin and Ethereum for Nearly a Month, with Independent Movement of ETH in Preparation for Shanghai Update.
The price of bitcoin surpassed $28,000 on March 19 and has not been below $27,000 since, save for a very small number of brief instances. It has made three efforts to break above $29,000, but none of them have been successful.
In other words, it has been trading for about a month in a relatively small range between $27,000 and $29,000.
January before crossing $25,000 on March 16—three days before $28,000. Hence, the climb is not linear, with two falls to $21,500 on February 10 and to $21,000 on March 10.
Hence, Bitcoin rebounded on March 11 and rose from about $21,000 to over $28,000 in eight days. Contrarily, the next twenty days were quiet.
Ethereum’s $1,800 market value since March 18 is identical. But, during the past two days, ETH has been trying to break $1,900, a mark it has not touched in 2023 as of April 4.
Hence, whereas ETH tracked BTC in the first quarter, it has recently tended to move independently, perhaps in preparation for the Shanghai update due on April 12. With a major upgrade like this, ETH prices usually drop.
This update will unleash more than 18 million ETH staking on the Beacon Chain.
Periods of lateralization that are somewhat protracted like this one frequently finish abruptly, with strong movements either up or down.
The critical date may only be April 12 because, should the price of ETH decline after the event, as it frequently does, this phase of lateralization could come to an abrupt end with a crash.
Furthermore, although it is unknown how many of the 18 million ETH that will be abruptly released may be withdrawn and sold, this could increase the selling pressure already there as a result of the “sell the news.”
Nevertheless, there’s more.
Fears of a recession have been growing over the previous few days, but especially since yesterday, in traditional markets.
There is no recession, notably in the US, and no data to suggest one will develop soon, but there is data that shows things may collapse significantly by the end of the year or throughout the following year.
High interest rates, which may rise more, are the main problem.
Yesterday’s US economic figures suggest the economy may be weakening. Since the high interest rates are expected to stay high for a long time, it’s hard to see how economic data could improve in the future months. They’ll likely worsen.
The Fed may not be able to arrest this downward cycle by lowering rates since it would weaken its fight against inflation, which is still too high.
The rise and fall of Bitcoin and ETH prices
The worldwide financial and money markets, especially in the US, affect Bitcoin and Ethereum pricing.
Due to the US’s March inflation report a few days later, the Shanghai update projections may change after April 12th.
Despite the gloomy outlook, prices may fall depending on inflation estimates.
In March, Eurozone inflation was dangerously close to crashing, therefore a rapid decrease in US inflation is possible. Because February saw a substantial American drop, March may not.
The Fed may delay the May rate hike and start cutting rates by year’s end if the result is weaker than expected. Two 25-point rate hikes in May and June are expected, with no drop by year’s end. The latter could hurt the market.