Is the bull market back? 5 important considerations (supplement)

Is the bull market back? 5 important considerations (supplement)

Ether prices kept pace this year with the crypto market rally. The ETH recorded great profits in January during the relief rally, then again from the beginning of March.

The world's second most valuable cryptocurrency after market capitalization was traded on March 10 at a spot price of $ 1,429. On April 13, the day the Shanghai Upgrade took place, Ether was traded for $ 2,000. This is a considerable increase of 36 % within one month.

Here are some important factors that influence the Ethereum Prize for the rest of the second quarter.

1. Bullisch: The Ethereum Shanghai Upgrade

The Ethereum Shanghai Upgrade could have something to do with the previous rally this spring. (Here is the reason why the term that you may be looking for is actually "Shapella upgrade".)

The upgrade creates a lot of positive mood for the network and the ecosystem. It is reaching another milestone in the development road map of cryptocurrency.

EIP-4895 crowns the fusion

Ethereum Improvement Proposal (EIP) 4895 probably gives the greatest influence on this update. It allowed validators who had 32 ETH Gestaket to refute their ether.

At the moment, an incredible 18 million ETH are on duty to secure the network. This is a full sum of ether worth over $ 30 billion that is about to become liquid if the owner of the private key decides to cancel the use.

But it doesn't look like the liquidity event triggered mass sales pressure at the price of ether. Parsec Analytics data on Tuesday only made deposits in ETH-staking streams of thousands of ETH, no flood of withdrawals. Meanwhile, analysts of the Bank of America say that they do not expect wave of Shapella sales pressure.

To round off the whole thing, Shapellas should contribute to reducing some gas fees in times of high network activity. What shouldn't you be optimistic about?

2. Baisse: US regulatory threats

How the regulatory environment in the United States will ultimately develop for cryptocurrencies is still in the stars. The open question and violent debate about what the crypto regulation will look like in the United States is a factor that overwhelm the young industry.

There is currently a debate about whose jurisdiction is most likely to be crypto. Meanwhile, the debate has some of the elements of a territory in a complete federal threesome crowds of members of the congress, the Securities and Exchange Commission, the Commodities Futures Trading Commission (CFTC), the IRS and US lawyers.

A central question of the debate: whether the authorities ultimately agree to regulate cryptocurrencies as goods or securities or something else. The SEC is primarily targeting Ethereum. The SEC chairman says that every crypto is a security except Bitcoin.

is Ethereum a securities such as stocks or a raw material such as oil?

Ethereum is particularly susceptible to this argument because it carries out contracts as one of its main services. But ether tokens are not equity in a profitable company.

You are proprietary usage pieces that increase with increasing value if the ecosystem of the apps in which you can be redeemed for services gains value. Ethereum compares it with oil, a raw material in the regulatory system.

Now a startup could build an Ethereum app that becomes extremely profitable, integrated and go to the NYSE. In this case, the SEC would have a clear responsibility for the exchange of shares of this company.

In any case, the regulation of Ethereum by the SEC should not be so bad for his assets. All stock exchanges for the stocks of publicly traded companies are SEC-regulated. This corresponds to trillions and abillions of dollars in market capitalization. The regulation could even cause a flood of institutional investors.

In addition, investors are currently pessimistic about Ethereum because they do not know how regulation could break through. Institutional investors are not on the wrong side at the SEC.

But if there were regulatory clarity so that investors know in one way or another how the United States will influence the future of crypto, this could change as quickly as the cryptoma markets are used to seeing enormous changes in capitalization.

3. Bullish: ETH fundamental analysis

The fundamental data from Ethereum are very optimistic for the ETH price in the second quarter.

The cumulative unique addresses of Ethereum continue to expand to new record heights. According to Etherscan data, the network had 227 million cumulative addresses on April 11. This corresponds to an increase of 17.93% compared to the number for the same key figure a year ago.

In addition, glass node data show that the daily volume of active Ethereum addresses as the sender or recipient remains healthy in a successful transaction in the second quarter.

ETH has also become a deflationary asset. This is very bullish for its prices, especially when the trend continues. Ironically, the network's ETH tokens were an inflationary asset if it was a proof of work. The offer experienced an inflation of over 4 % per year. Now that it is a proof-of-stake, Ethereum's economy has changed.

This is a result of EIP-1559:

"Usually a user would have to send a gas fee to a miner so that its transaction is included in a block. However, what EP-1559 suggests is to send this gas fee to the network itself. This is a kind of" burning "and there would only be an optional tip that is paid to the miner."

The original proposal is:

"A transaction price mechanism that contains a fixed network fee per block, which is burned and dynamically expanded/contracts the block sizes to cope with temporary overload."

Since his implementation in July 2021, over 2 million ETHs worth $ 6 billion have been burned. They were pulled out of circulation forever:

"The largest on-chain gas burner in the Ethereum network is the leading NFT marketplace OpenSea, followed by ETH transfers. Other gas eaters are Z Uniswapstrongblock, Tether etc."

This is a bullish design for the Ether Prize, since the largest earners in the network are now sending their fees back to support the price instead of miners who sell something to keep up with the operating costs.

4. Bullish: Institutional support for Ethereum

Institutional support for Ethereum is strong here in the second quarter of 2023. Fortune Magazine recently presented the Fortune Crypto 40 as an interest bully sign for the entire cryptom market.

It is a crypto benchmark list of 40 best crypto companies in several categories curated by Fortune. Ethereum came out in 1st place in the protocol category, in front of Bitcoin in second place. Polygon, Solana and Arbitrum followed the two top cryptos after market capitalization.

In the meantime, risk averse institutional investors will rather dive into the essential waters due to the Shanghai upgrade. For hedge funds, of course, binding their capital indefinitely in a risky asset with volatile price cycles on all sides.

Now that the TBD phase of the activation of the staking to secure the network is over by its migration, an enormous risk and the disadvantage of a long-eth position has disappeared from the equation.

5. Bärisch: macrorales such as interest rate increases and recession

Negative economic events and forecasts in 2023 could create global headwinds for asset prices. When the economy collapsed in 2020, Ether's price fell with the entire basement. When prices recovered and climbed by 2021, ETH recovered more strongly of the crypto form.

When the market cooled down in the course of 2022, ETH went under with it. Finally, when the stocks got legs under them again this year, ether increased again.

This strong correlation between important crypto prices and stock benchmarks is initially a very reliable trend. So if the economy is experiencing macro counterwind this year, Ethereum swims in the same tides. On board days and business offices, there is a majority consensus that a recession is imminent.

Red minutes of recent times showed that the central bank expects the recent failures in the banking sector to trigger the recession. These risks could be a factor for the price of Ether in the second quarter.

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