Will Shapella Upgrade Affect Ethereum Price?

Despite all the concerns, ETH managed to break the $2,000 mark, but withdrawals from staking are still ongoing. The large number of people trying to withdraw their cryptocurrency has resulted in a two-week queue. But how much pressure is this putting on the price of ETH? Is a crash still possible? Let's dive into some on-chain analysis to find out.

 

According to data from research service Rated, the number of validators who have decided to fully withdraw their coins has increased to 28,000. This is only 5% of the total number, which is over 560,000. However, there are still many who are waiting for partial withdrawals. There are around 430,000 of these.

As we know, there is not only withdrawal, but also replenishment from those who want to become validators of the Ethereum network. After all, not everyone took advantage of this opportunity earlier. However, according to information from Token Unlocks, currently, the advantage is on the side of the "fugitives", who are twice as many as the validators at the time of writing. But this ratio changes every day.

 

The analytical data from Nansen suggests that the overall impact of withdrawals on the network is relatively small. With around 18 million ETH used for validating transactions, the Cumulative Sum indicator has only decreased by 0.6% since the Shanghai update. In the graph below, the turquoise bars indicate the deposited amount of ETH, and the orange bars indicate the amount of ETH withdrawn.

It's worth mentioning that most of the validators who are withdrawing their assets from staking are associated with Kraken. This isn't surprising because in February, the Securities and Exchange Commission (SEC) prohibited Kraken from offering this service, which was a significant event at the time. This has also raised concerns about another major player in the liquid staking market, Coinbase. You can read more about this on our website.

 

Coinbase and some decentralized platforms like Lido may put some pressure on the price of ETH by warning their clients about delayed asset withdrawals. However, this is unlikely to have a significant impact since withdrawals are typically smooth, and there are still people making deposits. The Ethereum developers have done an excellent job creating a reliable mechanism for withdrawing from staking.

 

It seems that the price of ETH is now more dependent on other factors that affect the price of Bitcoin. When the leading cryptocurrency goes up or down, ETH usually follows suit.