Source: dailyhodl.com
On-chain analytics platform CryptoQuant is revealing the likely impact of the upcoming Shanghai upgrade on the price of smart contract blockchain Ethereum (ETH).
According to CryptoQuant, the selling pressure for the second-largest digital asset will be low after this month’s Shanghai upgrade.
The update will allow validators to withdraw ETH from Ethereum’s proof-of-stake blockchain for the first time following the transition from the proof-of-work consensus mechanism.
CryptoQuant says that 60% of all the staked Ethereum is currently below the price it was purchased at. The on-chain analytics platform says that there are 10.3 million ETH sitting at a loss equating to slightly over $16.86 billion.
CryptoQuant also says that nearly a third of the Ethereum staked on liquid staking protocol Lido is sitting at an average loss of about 63%.
“Two Reasons we argue why ETH selling pressure will be low after the Shanghai Upgrade:
- Currently, 60% of staked ETH is at a loss, representing 10.3 million ETH.
- The largest staking pool (Lido) holds almost 30% of all staked ETH at an average loss of nearly $1,000. The staked ETH has an average loss of 24%.”
Ethereum is trading at $1,637 at time of writing.
According to CryptoQuant, the risk of encountering high selling pressure occurs when the holders are sitting on “extreme profits.”
“Typically, selling pressure arises when participants have extreme profits, which is not currently true for staked ETH.
Additionally, the most profitable staked ETH was staked less than a year ago and has not seen significant profit-taking events in the past.”
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