Shapella Upgrade: Potential Selling Pressure Of 1.2 – 3 Million ETH

Key Points:

• The Shapella upgrade will allow validators to withdraw ETH from the beacon chain and introduce new functionalities to the execution and consensus layers.
• The selling pressure of ETH after the upgrade is estimated to be between 1.2 million and 3 million ETH, with the selling pressure being highest in the first three days after the upgrade.
• After the upgrade, the staked percentage of ETH may increase by 2–4 times, which could help hedge against potential selling pressure.

The Ethereum Foundation’s protocol support team has confirmed that the Shapella upgrade will be activated on the mainnet on April 12, 2023, at 22:27:35 UTC.

This upgrade will allow validators to withdraw ETH from the beacon chain and introduce new functionalities to the execution and consensus layers. Validators who run validators independently will have the option to choose between partial withdrawals and full withdrawals.

Partial withdrawal refers to the withdrawal of profits generated by each validator who staked 32 ETH, while full withdrawal refers to withdrawing all balances, including 32 ETH, from the blockchain. After the upgrade, the staked percentage of ETH may increase by 2-4 times, which could help hedge against potential selling pressure.

According to various analyses, the Shapella upgrade may result in selling pressure of between 1.2 million and 3 million ETH, with the selling pressure being highest in the first three days after the upgrade. However, the upgrade also frees ETH pledges from the risk of uncertainty and encourages more ETH holders to participate in staking. Recent data shows that market demand for ETH is growing, especially from retail investors, with over 23.3 million addresses holding at least 0.01 ETH, an eight-month high.

In addition, the demand for ETH from giant whales and institutions is also increasing, as addresses with more than 1,000 ETH and 10,000 ETH have recently increased. The supply of ETH on trading platforms has dropped to the lowest point since 2015, accounting for only 10.31% of the current circulation. This reflects that currency holders are confident in the long-term performance of ETH.

Overall, the Shapella upgrade is expected to bring much-needed flexibility to ETH staking, and the potential selling pressure is unlikely to affect the currency’s long-term performance significantly.

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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