As the launch of the Ethereum Shanghai Upgrade is approaching, investors are starting to get nervous as they are not sure whether the upgrade will lead to a positive or negative move from Ethereum. On February 22, Nansen, a chain-based analytics platform revealed some key factors Ethereum investors should know before the Shanghai upgrade begins.
The key factors were released in several tweets on Twitter and included important points such as the total amount of ETH deposited and the highest staker, the price of the main ETH deposit, and the selling pressure on ETH from unstaker after the launch of the Shanghai upgrade.
The Shanghai upgrade also known as ‘Shapella’ is a hard fork for the Ethereum network scheduled to launch on February 28, 2023. After Ethereum’s transition to the Proof of Stake mechanism last September, validators became an important part of the ecosystem.
A total of 32 ETH is required to become a validator on the Ethereum network. However, with platforms such as Lido, investors can stake less than 32 ETH and still be a validator in the network. The Shanghai upgrade will enable the withdrawal of staked ETH from the Ethereum Beacon chain.
Illiquid Staker To Determine Selling Pressure
According to data from Nansen, the Ethereum blockchain currently has a total of 16.8 million ETH stored on the network. Of the total amount, liquid staking platforms, Lido Finance has 29.5% of the amount, while other platforms such as Coinbase, Kraken, and Binance are only 26% combined.
Nansen notes that Lido has a large amount of ETH purchased, plays an important role and needs to be decentralized enough to protect the ecosystem from the wrath of centralized censorship.
Furthermore, while the outcome of the Shanghai Opening may be uncertain, Nansen suggested the price range when the main ETH deposit occurs is important for the event of a total withdrawal because it will determine the depositors’ profit margin at the time of the Shanghai upgrade spread.
Nansen’s on-chain data shows that the average deposit price for ETH is around $600 which led to an initial spike in deposits, followed by consistent deposits up to the $3,400 price level.
While revealing important details, Nansen stated that illiquid stakers in the Ethereum network are likely to sell their holdings when the withdrawal begins after the Shanghai upgrade, therefore, affecting the Ethereum market significantly. This staker category is responsible for 24.5% of all ETH staked which is approximately 4.1 million ETH, equal to $6.9 billion.
ETH Price Action Before Shanghai Open
Over the past 24 hours, ETH has moved in a bullish trend up by 1.8% after a slight retracement from yesterday. Furthermore, ETH has been in an uptrend since the beginning of the year along with other altcoins in the market.
The cryptocurrency has rallied significantly with more than a 40% move from $1,100 late last year to trade above $1,600 so far. However, even if the uptrend continues, ETH is still down 65% from the high of $4,878 seen in November 2021.
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