Ethereum (ETH) breached the $1,900 resistance for the first time in over nine months, sparking a bullish trend for the digital asset. This was a hard earned level as ETH was struggling below $1,900 for the past week. This recovery has certainly been a welcome development for investors, but what is driving the price?
Ethereum sharks are driving the price
According to Santiment, Ethereum shark addresses may have been behind the recent rally. In a report posted on Twitter, Santiment reveals that these accounts containing between 100 and 10,000 coins have been accumulating ETH at a rapid rate for the past nine months.
In total, these shark addresses added 2.27 million coins to their holdings, resulting in $4.2 billion. This accumulation brought their holdings to a new one-year high, as they collected around 1.4% of the total ETH supply.
🦈📈 #ethereal It jumped above $1,870 today for the first time since Aug. 17, 2022. This nearly 8-month high comes as the sharks have been steadily accumulating since last summer. Addresses containing 100-10k $ETH they have accumulated $4.24B in the last 9 months. https://t.co/leyQqlbvED pic.twitter.com/b5YazPfSO5
— Santimento (@santimentfeed) April 4, 2023
Such an accumulation trend can have bullish implications for any digital asset and this could have been the case for ETH. As its holdings crossed a new one-year high, the ETH price was able to break above $1,900, which was a new nine-month high for the cryptocurrency, and has held steady above this level ever since.
What else could be behind the rise of ETH?
Besides the sharks accumulating ETH, another reason for the rise could be the anticipation of the next Shapella update. With this update, those interested in the Ethereum network will be able to withdraw their staked ETH, something that has been impossible to do since Beacon Chain launched.
ETH rises to new 9-month high | Source: ETHUSD on TradingView.com
However, the update could very well be a “buy the rumor, sell the news” event for one simple reason; more ETH returning to circulation. Realistically, by the time stakeholders are able to withdraw their ETH, it is expected that some of this ETH will find its way to exchanges while trying to make a profit. But with the ETH price significantly below its all-time high, quite a few are likely to leave their ETH staked while they wait for better prices.
However, the coins that hit the exchanges will create selling pressure for the asset, which will likely lead to a decline in price, as well as investors making a profit on their assets. A good example is the Cardano Alonzo update, in which the ADA price rose to new all-time highs before the update and then dropped significantly after the update was complete.
However, ETH still sees good potential as of this writing, changing hands at a price of $1,910.
