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The price of ether (ETH) has been resilient following the Ethereum blockchain's Shanghai upgrade (aka Shappela) last week, crypto exchange Coinbase (COIN) said in a research report Friday.
The successful upgrade supported better-than-expected ether price action, which Coinbase says could continue through the end of April. The upgrade allows validators to withdraw staked ether that have been locked up and to claim rewards.
Within the first 24 hours of withdrawals being enabled, ether's supply has been limited for a few reasons, the report said.
First, the "majority of addresses receiving partial withdrawals have not spent their received rewards with around 70% of addresses now having properly set their withdrawal credential prefixes to 0x01," analysts David Duong and Brian Cubellis wrote.
Second, full withdrawals are being processed, but their impact on the market has been partly offset by a "healthy number of new entrants in the validator entry queue," the note said.
Another reason is ether's relative underperformance compared with bitcoin (BTC) year to date, which has left a lot of room for catchup after the Shanghai upgrade, the note added.
Coinbase says because of this relative underperformance, it has seen some rotation from bitcoin into ether.
The macro environment also remains conducive to risk taking for the time being, which also may support ether's price, the report added.
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Will Canny is CoinDesk's finance reporter.