Bitcoin and other cryptocurrencies faced a decline in the last 24 hours, with Bitcoin falling under $30,000, leading to an overall market capitalization decline of 1.2%. Ethereum saw the largest drop among largest tokens, trading just over $1,860. Liquid staking tokens were also affected, with Lido’s IDO governance tokens and Rocket Pool’s RPL dropping 10% and 8%, respectively, media reports said.
The decline in prices was likely due to traders taking profits ahead of two significant events that are set to happen on Wednesday: The U.S. Consumer Price Index (CPI) report for March and the Shapella upgrade for the Ethereum network. The Fed is concerned about sticky inflation, and a soft inflation report may allow the Fed to go for a rate hike in May, which could benefit both traditional markets and riskier assets such as Bitcoin.
On April 12, the Ethereum network is scheduled to undergo a simultaneous upgrade known as Shapella, which combines the Shanghai and Capella upgrades. This upgrade will allow investors to withdraw their staked Ether, which is currently locked and cannot be traded freely.
According to some experts, the upcoming Shapella upgrade for the Ethereum network could positively impact Ether’s price as it will make staking and earning yields from blockchain more available to users. Chen Zhuling, the CEO of staking service RockX, stated that the ability to withdraw staked Ether, combined with the increasing favor of liquid staking venues, will attract more retail lenders who were formerly hesitant to lock up their funds for an uncertain portion of time. This development could potentially contribute to a bullish trend for Ether, as more users begin to stake their coins and earn rewards.
The market volatility and upcoming events highlight the unpredictability of the crypto market, which can fluctuate based on a variety of factors. It is crucial for investors to stay informed about developments and consider all factors before making investment decisions.