The highly anticipated Shanghai upgrade on the network Ethereumwhich must take place simultaneously with the Capella upgrade (bringing the name of shapella) on April 12, could encourage investors to withdraw and possibly sell their ETH staked on the Ethereum blockchain. Glassnodean on-chain analytics company, believes that at least $300 million worth of Ether could be sold due to the upgrade, creating significant selling pressure in the market.
In a report released on Tuesday, Glassnode revealed that the analytics company forecasts a total of 170,000 ETH for sale after Shanghai upgrade, with only 100,000 ETH ($190 million) of total accumulated rewards being withdrawn and sold. The estimate is based on an update of 50% withdrawal credentials, depositor segmentation and assumptions regarding investor conviction and profitability. These factors take into account the behavior of the portfolios, the duration of the staking and the presence of liquid staking derivatives such as Lido.
What impact on the price of ETH (Ethereum)?
Despite the expected selling pressure, Glassnode suggests that the overall price impact of theETH could be minimal. Even in an extreme case where the maximum amount of rewards and staking is withdrawn and sold, the sale volume would remain within the range of the average weekly inflow volume on the exchanges. As a result, Glassnode concludes that the most extreme case would always have a acceptable impact on ETH price.
The upgrades of Shanghai and of Capellacollectively referred to as shapellawill allow investors to withdraw their ETH by staking on the blockchain Ethereum, a feature currently unavailable. As staking rewards become instantly available this week, traditional banks like JPMorgan anticipate some selling pressure on Ethereum.
Ether will underperform Bitcoin, says JPMorgan
According to analysts led by Nikolaos Panigirtzogloupotential additional sales from staking ETH balances belonging to “entities in difficulty” could increase the selling pressure in the coming weeks. JPMorgan expects Ethereum to underperform Bitcoin (BTC) over the next few weeks due to these factors.
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