The Ethereum Shanghai upgrade is the most-anticipated change on the Ethereum blockchain that will fully transition it to proof-of-stake (PoS). Validators are especially waiting for the upgrade to remove staked Ethereum from the Beacon Chain. Thus, the general sentiment in the market is that the Shanghai upgrade will cause the ETH price to fall deeply.
However, CryptoQuant data indicates low selling pressure even after the Shanghai upgrade. Despite ETH staking withdrawals after the Shanghai upgrade, validators and stakers will continue to stake their ETH.
Two reasons supporting low selling pressure — most participants are at a loss and the largest Ethereum staking pool’s depositors are also at a loss.
According to Etherscan data, 17.44 million ETH worth about $28.70 billion have been deposited into Ethereum’s Beacon Deposit Contract, representing nearly 14% of the total supply. These staked ETH remains locked on the chain until the Shanghai mainnet upgrade in March.
Currently, 60% of ETH staked on the Beacon Chain are at a loss, representing 10.3 million ETH. Moreover, the largest Ethereum staking pool Lido accounts for over 30% of all staked ETH, with an average loss of nearly $1,000. Thus, the staked ETH on Lido is at an average loss of 24%.
Generally, an investor sells crypto assets when in profit. Thus, staked ETH participants are currently at a loss and selling pressure will remain low after the Shanghai upgrade. Additionally, the most profitable staked ETH was staked less than a year ago and has not seen significant profit-taking events in the past.
Ethereum Price Shows Upside Momentum
Ethereum price fell nearly 1% in the last 24 hours, with the ETH price currently trading at $1,640. The 24-hour low and high are $1,635 and $1,672, respectively. While the ETH price to remain under pressure due to the fear of a 50 bps rate hike by the U.S. Federal Reserve, a sudden fall is likely impossible.
During the recent Ethereum Shanghai upgrade on the Sepolia testnet, the ETH price remains strong above $1,660.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
