- Ethereum analysts at Glassnode estimate that 170,000 ETH worth $317 million is likely to be unlocked and sold post Shanghai.
- Experts argue if maximum amount of rewards and stake are withdrawn and sold, the volume still falls within the range of average weekly inflow.
- Up to half of the total Ethereum staked in the ETH2 deposit contract is currently sitting on unrealized losses, and is likely not to be sold.
Ethereum Shanghai upgrade goes live in under sixteen hours, enabling ETH token withdrawals for holders. Experts at the crypto intelligence tracker Glassnode have estimated that at least $317 million in ETH will be unlocked, adding to the selling pressure on the asset.
Also read: Ethereum holders de-risk as ETH price rallies to $1,900 ahead of Shapella upgrade
Ethereum Shanghai to unlock at least 170,000 ETH
Ethereum analysts at Glassnode estimated the amount of staked ETH tokens that may be withdrawn and sold post the Shapella (Shanghai + Capella) upgrade. Experts evaluated the different cohorts of stakers and their motivations for selling ETH, to estimate the volume of ETH tokens that would hit exchanges post the event.
The team projected that only 100,000 ETH worth $190 million in accumulated rewards are likely to be sold. Only a limited amount of staked Ether will be released per day and nearly 70,000 ETH worth $133 million will become liquid.
Half of the total staked Ether is currently underwater
Of the total Ethereum staked in the ETH2 deposit contract, at least 50% is currently sitting on unrealized losses. Currently, the average deposit price of Ethereum staked in the deposit contract is $2,136, stakers are likely sitting on an unrealized loss of -13% on their stake.
Experts estimate that stakers sitting on unrealized losses might be reluctant to sell their ETH on exchanges. This reduces the expected selling pressure on the altcoin.
How much Ether will hit exchanges in the next two days
Analysts estimated that a minimum of 45,098 ETH worth $83.3 million will exit the ETH2 deposit contract on the Beacon Chain between April 12 and 14. This indicates a selling pressure of nearly $80 million across cryptocurrencye exchange platforms. There is a limit on the number of validators that can exit per day and there is a mechanism to protect against the rapid draining of staked ETH.
Taking these limitations into consideration, ETH community can expect upwards of 45,000 Ether flooding exchanges within the next 48 hours. Irrespective of the likely increase in selling pressure, Ethereum price recently climbed above the $1,900 level in an explosive move.
Will unlocked ETH increase liquidity and drive NFT demand?
NFT proponents and influencers are arguing that a percentage of unstaked Ether will make its way to NFTs. When the ETH2 Beacon Chain contract went live, ETH was removed from circulation and staked. In the meanwhile, the floor price of blue-chip NFT collections climbed steadily. Atareh.eth, an NFT proponent and analyst argues that the total maket capitalization of NFTs has climbed significantly since the launch of ETH staking.
ETH staking launch and NFT market cap
Despite tumultous events in crypto, NFTs have sustained in terms of growing market capitalization and activity. ETH token unlock could turn out to be bullish for blue-chip NFT projects and holders, if a percentage of unstaked ETH or capital from the sale of Ether flows into the sector.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
US presidential election outcome could shape the future of crypto
US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).
Bitcoin ETFs beat Gold ETFs with 65% gain since launch
Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand
Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF
Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.