Ethereum prepares for Shanghai hard fork in March 2023; will ETH crumble under selling pressure?

• Ethereum network developers are preparing for the Shanghai hard fork with a target release time of March 2023. 
• The upgrade will include Ethereum Improvement Proposal EIP 4895, allowing staked Ether tokens to be withdrawn. 
• Ethereum price could crumble under selling pressure from the unlocked tokens. 

Ethereum, the second largest altcoin by market capitalization, is on track to unlock staked ETH tokens after the Shanghai hard fork in March 2023. The upgrade includes an improvement proposal that allows users to unlock their ETH. The altcoin is likely to battle rising selling pressure from the event. 

Also read: Litecoin whales prepare for third halving, how high will the LTC price go?

Ethereum developers gear up for Shanghai hard fork

Ethereum developers are working on the “Surge” after the successful completion of the Merge. The Merge was the altcoin network’s transition from a proof-of-work to a proof-of-stake network, reducing its energy consumption by 99%. Developers are working on the Shanghai hard fork, and staked token unlock through Ethereum Improvement Proposal (EIP) 4895. 

The Surge was supposed to go live with the next upgrade in the second-largest cryptocurrency by market cap. Developers recently confirmed that “The Surge,” EIP 4844, known as proto-danksharding, will be prioritized after staked token unlock. “The Surge” was expected to increase the scalability of layer-2 scaling solutions by orders of magnitude and prepare the chain for sharding. 

In the case of Ethereum, sharding is the concept of dividing large volumes of data required for roll-ups across the complete blockchain network. It could help reduce network congestion and increase transactions per second. 

In response to criticism over the lack of staked Ethereum withdrawal functionality since December 2020, developers prioritized EIP 4895 for the next upgrade on the Ethereum chain. 

What to expect from Ethereum price after staked ETH unlock

Ethereum price could experience volatility close to the token unlock event. It remains to be seen whether it is a “sell the news event” and gets priced in before the Shanghai hard fork. Guy, a crypto analyst at Coin Bureau, believes the possibility of “unstaking” staked ETH tokens could encourage investors to stake more Ethereum and cushion the price impact of the unlock. 

Guy was quoted as saying:

Now, I wouldn’t at all be surprised if it was slightly bearish in the short term if we do see some selling. But I think the future for ETH is so, so bright, and I think Shanghai, assuming it goes off without a hitch as the merge did, then I think 2023 could be a really big year for Ethereum and for ETH.

The expert believes Ethereum could trade sideways for most of 2023. 

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