The Ethereum community is eagerly awaiting the highly anticipated Shanghai upgrade, which will mark the complete transition of the Ethereum blockchain to proof-of-stake (PoS). One of the key changes expected from the upgrade is the removal of staked Ethereum from the Beacon Chain, a development that validators are especially looking forward to. Despite this, many market participants anticipate that the upgrade could lead to a significant drop in the price of ETH.
However, according to data from CryptoQuant, the selling pressure on ETH remains low even after the implementation of the Shanghai upgrade. This is despite the fact that there have been staking withdrawals following the upgrade. It appears that validators and stakers are still willing to stake their ETH, which could have a positive impact on the cryptocurrency's price going forward.
There are two reasons that support the low selling pressure of Ethereum: first, most participants are currently experiencing losses, which discourages them from selling. Second, depositors in the largest Ethereum staking pool are also at a loss, which further reduces selling pressure.
Based on Etherscan data, the total amount of ETH deposited in Ethereum's Beacon Deposit Contract is 17.44 million, valued at approximately $28.7 billion, which represents nearly 14% of the total supply. These staked ETH are locked on the chain until the Shanghai mainnet upgrade in March.
Ethereum Price On-Chain Data. Source: CryptoQuant
As of now, approximately 60% of the total ETH staked on the Beacon Chain is at a loss, equivalent to 10.3 million ETH. Lido, the largest Ethereum staking pool, holds more than 30% of all staked ETH and is facing an average loss of nearly $1,000. The staked ETH on Lido is currently at a 24% average loss.
Typically, investors tend to sell their crypto assets when they are in profit. However, staked ETH participants are presently experiencing losses, and therefore, selling pressure is expected to remain low even after the Shanghai upgrade. Additionally, the most profitable staked ETH has been staked for less than a year and has not encountered any significant profit-taking activities thus far.
Ethereum Price Shows Upside Momentum
In the past 24 hours, the price of Ethereum has declined by almost 1%, and as of now, it is trading at $1,640. The range of its 24-hour low and high is $1,635 and $1,672, respectively. Although the fear of a 50 bps interest rate hike by the U.S. Federal Reserve continues to put pressure on the ETH price, a sudden drop is unlikely.
Despite the recent Ethereum Shanghai upgrade on the Sepolia testnet, the ETH price remains resilient, trading above the $1,660 level.
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