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Ethereum Drops Below $1,800 But Shanghai Upgrade Promises Future Gains

2 mins
Updated by Ali M.

In Brief

  • Ethereum crossed $1,800 for the first time in seven months.  
  • The recent DeFi boom suggests more ETH gains ahead. 
  • Ethereum now faces minimal resistance as it approaches $2,000.
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Ethereum has crossed $1,800 for the first time since August 2022. Increased smart contracts traction and a successful scheduled network upgrade could see the ETH price enter a bull rally. 

Crypto Investors Park Funds in DeFi Protocols

Ethereum has attracted new demand following the recent banking crisis that saw investors withdraw over $20 billion dollars from the failed Signature Bank and Silicon Valley Bank. The bank runs appear to have led some crypto-affiliated depositors to move their funds into DeFi protocols built on Ethereum.  

The recent spike DeFi activity, amongst other crucial on-chain indicators, points towards an Ethereum bull rally in the coming weeks. 

On-chain data from Glassnode shows there has been a spike in the supply of ETH locked in DeFi. After a week-long downtrend, it took an upturn on March 13, a few days after Silicon Valley Bank collapsed. 

Between March 13 and March 20, the supply of Ethereum in smart contracts rose by nearly 270,000 ETH. This represents 0.22% of the total ETH supply in circulation, worth approximately $200 million. 

Ethereum (ETH) Supply In Smart Contracts. March 2023
Ethereum (ETH) Supply In Smart Contracts. March 2023, Source: Glassnode

When DeFi investors increase the volume of tokens locked in smart contracts, it reduces the units available to be traded on crypto exchanges. The consequent decline in sell pressure caused by the recent DeFi boom could power Ethereum into a bull market. 

Furthermore, the Network Value to Transactions (NVT) ratio is another critical on-chain metric that supports the bullish thesis. The NVT ratio of Ethereum has dropped considerably compared to the values recorded in the first week of March. 

As of March 19, the NVT ratio was 127.27, 40% less than the 213.75 reported on March 5. The decline in the NVT ratio typically means that the underlying network traction has increased considerably and the underlying token is undervalued.

Ethereum (ETH) Network Value to Transactions (NVT) ratio, March 2023
Ethereum (ETH) Network Value to Transactions (NVT) ratio, March 2023. Source: Glassnode

If ETH can sustain the current uptrend in DeFi activity and maintain low levels of the NVT ratio, crypto investors can expect further upside. 

Ethereum (ETH) Price Prediction: $2,000 on Sight 

IntoTheBlock’s Global In/Out of the Money (GIOM) data provides insight into the potential ETH bullish price performance. It tracks the price distribution of token holders based on the volume of tokens held in each address.

Ethereum price will likely face minimal resistance as it approaches the $2,000 zone. Here, 2.8 million addresses that hold 3 million ETH could take some profit. Still, if this sell zone does not derail the rally, an upswing toward $2,900 is likely, where 26 million addresses bought  8.3 million ETH. 

Ethereum (ETH) In/Out of Money data. March 2023
Ethereum (ETH) In/Out of Money data. March 2023. Source: IntoTheBlock

For the bears to take charge, ETH price first has to drop below the $1,600 mark, where 14.3 million addresses had previously purchased 8.3 million tokens. A sustained drop below this support zone could trigger a steep downswing below $1,400, where a cluster of 16 million addresses may look to sell some of their 6.4 million ETH to avoid further losses. 

Ethereum holders will also watch out for the Shangai upgrade, now scheduled for April 12. Some investors expect a successful launch to trigger a price rally, while others expect around 16 million staked ETH tokens to be sold.


In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.