Ethereum: Should we Expect Selling Pressure After the Next Update?
CryptoQuant shared insights about selling pressure for Ethereum (ETH) after the upcoming Shanghai upgrade, using its on-chain analysis.
CryptoQuant, a popular on-chain analytics platform, has released an analysis on the likely impact of the upcoming Shanghai upgrade on the price of Ethereum (ETH), the second-largest digital asset by market capitalization.
The upgrade will enable validators to withdraw ETH from Ethereum’s proof-of-stake blockchain for the first time following the transition from the proof-of-work consensus mechanism.
According to CryptoQuant, the selling pressure on ETH will likely be low after the Shanghai upgrade for two key reasons.
Firstly, the on-chain analytics platform states that 60% of all the staked Ethereum is currently below the price it was purchased, equating to 10.3 million ETH at a loss of over $16.86 billion. This means many investors holding the altcoin are likely reluctant to sell at current market prices, as they would realize a loss.
Secondly, CryptoQuant notes that nearly a third of the Ethereum staked on the liquid staking protocol Lido is at an average loss of about 63%. The largest staking pool, Lido, holds almost 30% of all staked ETH at an average loss of nearly $1,000, which means that the staked ETH has an average loss of 24%. As a result, the risk of encountering high selling pressure is low, as holders are not sitting on “extreme profits.”
2 Reasons we argue why ETH selling pressure will be low after the Shanghai Upgrade
🧵👇 1/4 pic.twitter.com/bljiBS574Q
— CryptoQuant.com (@cryptoquant_com) March 2, 2023
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CryptoQuant explains that selling pressure often arises when participants have extreme profits, which is not currently valid for staked ETH. Additionally, the most profitable ETH was staked less than a year ago and has not seen significant profit-taking events in the past.
In summary, CryptoQuant’s analysis suggests that the Shanghai upgrade is unlikely to trigger significant selling pressure on Ethereum and that the digital asset’s price is likely to remain stable.
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
