Bitcoin Dips Below $30K, Ether Tokens Plummet Ahead Of Shapella Upgrade

Key Points:

• Bitcoin drops below $30K.
• Liquid Staking Tokens fall by double digits.
• Investors prepare for U.S. CPI and Ethereum Shapella upgrade.

Bitcoin (BTC) has experienced a decline below the crucial $30,000 level in early European hours on Wednesday, resulting in an overall market capitalization decline of 1.2% in the last 24 hours.

This decline was led by Ethereum (ETH), which traded just over $1,860, and was followed by BNB, Cardano’s ADA, and XRP, all of which gave up gains from Monday night. However, Solana’s SOL remained in the green.

The slump also affected the so-called Liquid Staking Tokens, with Lido’s IDO governance tokens falling as much as 10% and Rocket Pool’s RPL dropping 8%. Both protocols lock billions of dollars to provide yields on ether staking to users, who can stake any amount of ether to earn rewards without requiring to put up 32 ether to run a validator node.

Wednesday morning’s drop resulted in over 96% in longs, or bets on rising prices, to be liquidated since early Asian hours, according to data. Traders likely took profits ahead of two critical developments scheduled for Wednesday: The U.S. Consumer Price Index (CPI) for March, and the much-awaited Shapella upgrade for the Ethereum network.

The U.S. Federal Reserve is still concerned about sticky inflation, and softer inflation data may allow the Fed to go for a 25 basis points rate hike at the FOMC meeting on May 2. This could potentially buoy traditional markets and riskier assets such as bitcoin.

Meanwhile, the Shapella upgrade, a portmanteau of Shanghai and Capella, two major Ethereum network upgrades that are expected to occur simultaneously on April 12, will allow investors to withdraw their ether staked on the Ethereum blockchain. Currently, staked ether cannot be withdrawn or freely traded.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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