CryptoQuant Deflates ETH Sell-off Expectations Ahead of Shanghai Upgrade

  • Profit quotient of staked ETH and the ROI status of the largest staking pool’s depositors will determine ETH’s trend at Shanghai upgrade.
  • 60% of the staked ETH representing 10.3M ETH is at a loss, as per CryptoQuant data.

CryptoQuant, a community-based data analysis platform for cryptocurrencies, claims that there will be a low ETH selling pressure even after the upcoming Ethereum Shanghai upgrade. In a report posted on its website, the comprehensive data analysis platform outlines why traders would be reluctant to sell their ETH tokens even when the opportunity arises.

According to CryptoQuant, the two primary factors they base their analysis upon are the profit quotient of all the staked ETH and the ROI status of the largest staking pool’s depositors. The analysis platform explained that both categories of stakers are at a loss and would be unmotivated to sell their ETH holding under the current conditions.

The Shanghai fork is an upgrade that will allow ETH stakers to withdraw their staked ETH without restriction. Users expect this to happen in March 2023. All along, there have been expectations by the crypto community that the upgrade could lead to high selling pressure for ETH, the native token of the Ethereum blockchain.

Analysts postulate different reasons that could encourage an ETH sell-off after the Shanghai upgrade, including profit-taking and the curiosity of testing the process. Based on CryptoQuant’s analysis, these two reasons have faded, and ETH stakers are unlikely to sell their holdings soon.

In a detailed explanation, CryptoQuant expounded that 13% of the total ETH supply is staked and cannot be withdrawn until after the Shanghai upgrade. At the current price of ETH, 60% of the staked ETH representing 10.3 million ETH is at a loss, as per CryptoQuant data.

Lido, the largest ETH staking pool, holds almost 30% of all the staked ETH. On average, all the ETH staked on Lido is at a loss of up to $1,000, equivalent to a 24% loss margin.

Based on these conditions, CryptoQuant believes that ETH stakers would be in no hurry to dispose of their holdings. After all, selling pressure arises when investors have extreme profits. CryptoQuant added that the most profitable ETH was staked less than a year ago, meaning it has not accrued significant profit. Hence, there isn’t much motivation to sell.

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