The upgrade, also known as Shanghai, allowed for withdrawals for the first time from Ethereum’s proof-of-stake blockchain, which has some 18 million ETH worth $36 billion locked in staking contracts.
Prior to the upgrade, some crypto watchers predicted that the event would flood the market with millions of unlocked ETH and crash the price of the second largest cryptocurrency. However, there were others who predicted little impact or even a rise in price. Fortunately, the implementation went smoothly, pushing ETH’s price above $2,100 the day following, its highest level since May 2022. ETH even outperformed bitcoin (BTC) in that 24-hour period.
CryptoQuant’s data shows that traders deposited 1,101,079 ETH to exchanges between April 13 and April 16, while only removing 921,579 tokens. This was the largest four-day net inflow in a month. Although investors transferring tokens to exchanges usually indicates they are preparing to sell, there are some who sold ETH during the price rally post-Shanghai.
However, since the upgrade, the ETH-USD trading pair on crypto exchange Coinbase recorded $28 million more sell orders than buy orders, according to crypto market research platform Kaiko. This suggests that some traders have sold ETH during the price rally post-Shanghai.
It is worth noting that while the event has caused a surge in ETH on exchanges, this does not necessarily mean that the cryptocurrency’s price will decline. It is possible that traders are simply moving their ETH to exchanges for other reasons, such as to take advantage of trading opportunities or to prepare for future market movements. Overall, the impact of the Shanghai upgrade on the cryptocurrency market remains to be seen.
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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