Bitcoin Slides Below $30K, Ether Staking Tokens Receive Before Shapella Upgrade

Bitcoin (BTC) retreated below the crucial $30,000 level in the early European hours on Wednesday, with the overall market cap down by 1.2% in the past 24 hours.

Ether (ETH) was trading at just over $1,860, leading the decline among the major tokens. Solana’s SOL remained in the green while Cardano’s BNB, ADA and XRP gave up gains from Monday night.

The so-called Liquid Staking Tokens have plummeted. Lido’s IDO Governance Tokens are down as much as 10%, while Rocket Pool’s RPL is down 8%. Both protocols lock in billions of dollars to provide returns on ether storage for users – who can stake any amount of ether to earn rewards without having to mint 32 ether to run a verification node.

The data showed that Wednesday morning’s drop caused more than 96% of long positions, or bullish bets, to be liquidated since the early Asian hours.

Traders will likely book profits ahead of two major developments scheduled for Wednesday: the US Consumer Price Index (CPI) for March, and the long-awaited Shapella upgrade to the Ethereum network.

The US Federal Reserve remains concerned about viscous inflation, and weak inflation data could allow the Fed to increase interest rates by 25 basis points at the FOMC meeting on May 2 – which could boost traditional markets and riskier assets like bitcoin.

On the other hand, Shappella — a gateway to Shanghai and Capella, two major Ethereum network upgrades that are expected to happen simultaneously on April 12 — will allow investors to withdraw their ether from the Ethereum blockchain. Stacked ether cannot be freely withdrawn or traded at this time.

As such, some say the event could be bullish for ether, as it becomes more accessible for users to receive and capture returns directly from the blockchain.

said Chen Zhuling, CEO at staking service RockX, in a note to CoinDesk earlier this week.

For now, traders appear to be taking risks.