The #ShanghaiHardfork.
"Is it bullish or is it bearish?"
Let's check it out.
The FTX meltdown served as a wake-up call for the #Ethereum Foundation. Users with #ETH staked on the platform could not get it out.
This pointed out a significant weakness in ETH.
Not being able to unstake meant the possibility of losing your entire staked ETH if the centralized platform went under.
That is why not long after it, the Ethereum Foundation announced the Shanghai Hardfork to happen in March, but later postponed it to the 12th of April.
The key takeaway is that users will be allowed to unstake both their initial deposited ETH and their rewards.
This is big. Both, bullish and bearish if you ask me.
I will outline the bearish scenario first, as it is more obvious.
The current staked ETH amounts to more than 17 MILLION!!!
That is... A LOT.
And that "a lot" of ETH is being freed up at the same time, on the 12th of April.
The selling pressure should be high, as some validators didn't have access to their ETH for 2+ years now.
This could cause a good price drop in ETH/USD.
Now, to the bullish scenario.
A good portion of people have been repulsed by staking simply because it was not possible to withdraw their money.
This will soon be made possible, meaning people that are holding ETH wouldn't be against the idea to stake their ETH to gain some yield on it.
Even now, we can observe this, with high staking inflows coming in as we are approaching the date of the hard fork. Notice the inflows shown in the image located at the end of this post. It is INSANE!!!
This means that a lot of ETH could be staked and investors would choose to gain passive interest, as the negative price action could be subsidized by the staking rewards.
That's assuming that we will have any negative price action.
If we take only this into context, I really don't know where I stand. On the one hand, we have an already evident bullish case but on the other hand, we have a pretty logical bearish case.
We will have to wait and see for the results.
However, if we take this into context with a lot of my macro analysis that I did, I am leaning a bit bearish over the long term.
That doesn't mean the price can't pump in the next few weeks or months! That's why I am so indecisive.
If you are interested in my other analysis, please do consider checking out my content, as I do it 100% for free, to inform you better.
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