Ether $1,914 has broken beyond $1,900 for the first time in over seven months, only a week before staking withdrawals are enabled in the second-largest cryptocurrency by market capitalization's next big update.
According to CoinMarketCap statistics, the last time Ether was worth more than $1,900 was on August 16, 2022, during a broader crypto sell-off when the US Federal Reserve was raising the Federal Funds rate at a record pace to battle inflation.
The Ethereum Shanghai hard fork, scheduled for April 12, will include EIP-4895, which would allow validators and stakers to remove staked ETH from the beacon chain and additional EIPs aimed at at increasing transaction speeds while lowering transaction costs.
The recent price spike could be because to predictions that the Fed will ease up on its quantitative tightening efforts as rate increases cause fractures in the global banking industry, or it could be due to increasing demand for Ether, given that staking is set to become more flexible.
But Bitcoin $28,564 has also seen recent advances. According to TradingView, the ETH/BTC trading pair, which compares the price of ETH to the price of BTC, has climbed by about 3% in the last week, indicating that both variables may be contributing to Ether's price growth.
While Shanghai refers to the fork on the execution layer client side, Capella is the consensus layer client side upgrade name and is planned to be executed shortly after Shanghai on April 12.
All smart contracts and protocol rules are stored in the execution layer, while the consensus layer ensures that all network validators respect these rules. According to CoinMarketCap, the price of ETH decreased drastically following the execution of The Merge on September 15, 2022, losing slightly under a quarter of its value in one week.
Despite some analysts and traders predicting that the freeing of staked Ether will cause sale pressure, what happens after the Shanghai and Capella upgrades is presently unknown.