The Shapella Shanghai upgrade of the Ethereum blockchain will be launched on Wednesday. The selling pressure that the crypto market was originally worried about did not really happen before the upgrade. Ethereum was reported at $1,920 in the European market on Tuesday (April 11), aiming at a bullish target of $2,000. Technical experts predict that if it breaks through $2,000, Ethereum will have almost no pressure to the $2,500 range, and it will be expected to rise explosively.
Ethereum hit a 24-hour high of $1,936 before the recent pullback. Analysts evaluated the Ethereum price chart and pointed out that there is almost no resistance between $2,000 and $2,500. Follow the official account: Breeze over a lake FXStreet quoted crypto technology expert CryptoJelleNL as predicting that once the Ethereum price breaks through the $2,000 resistance level, the price will rise to $2,500.
FXStreet crypto analyst Ekta Mourya mentioned that $1,821 and $1,882 are two key levels for Ethereum’s upward trend. If a correction occurs, the Ethereum price may plummet to these two levels.
According to cryptocurrency analyst Justin Bennett, a sustained break above the $1,944 level could take Ether to its $2,000 target, with the $1,944 level acting as a key resistance level.
The Shapella upgrade will enable validators to withdraw their ether from the beacon chain and bring new features to the execution and consensus layers. After the upgrade is completed, validators who run validators independently can choose between partial withdrawals and full withdrawals. Partial withdrawals refer to the withdrawal of profits generated by each staked 32 ETH validator. This part of the reward can be withdrawn immediately, and the validator will continue to add blocks to the beacon chain.
The time required to withdraw these rewards will depend on the number of partial withdrawal requests made after the Shanghai upgrade. Each slot can accept 16 partial withdrawal requests, which occur every 12 seconds, and the queue may take several hours. At the same time, Ethereum has designed an automatic scanning function. The network will scan regularly and automatically withdraw the profits of nodes with balances exceeding 32 ETH to the user's designated address according to the scanning progress.
Since most users choose to participate in staking through LSD on decentralized or centralized trading platforms, the Ethereum of these pledgers has actually always been liquid, so there is not much motivation to sell. Decentralized LSD platforms such as Lido currently account for 33.2% of the total Ethereum staked. In addition, about 27.1% of people stake through centralized trading platforms such as Coinbase, Binance and Kraken. Therefore, about 60.3% of Ethereum is staked through LSD.
According to data website Nansen, among the temporarily illiquid Ethereum, about 59%, or 3.62 million to 4 million Ethereum, are in a profitable state, and they may withdraw part or all of their money after unlocking. Of course, some of these pledgers will choose to continue staking. Nansen estimates that the selling pressure after the Ethereum Shanghai upgrade will be between 1.2 million and 3 million Ethereum, but due to the daily withdrawal limit, this process will be slow.
Analysts at Bloomberg believe that Ethereum as a whole could face selling pressure as tokens unlock. Experts identify challenges that nodes in the network may face in returning user funds after Ethereum unlocks.
However, the general market view is that since the Ether staked in the Ethereum beacon chain has not reached the expected profit target, after the Shanghai upgrade is unlocked, holders are unlikely to sell their holdings, but will continue to stake and wait for profits. This means that the selling pressure is likely to be just a false warning.
For the first time since 2020, stakers of the ETH2 deposit contract can unlock their tokens, making it a key event in the Shapella Shanghai upgrade. More importantly, the market is constantly reminded that Ethereum holders need to be prepared for the technical challenges faced by nodes and validators participating in token unlocking.
The Shapella upgrade was tested smoothly on the Goerli testnet, but it remains to be seen how the rollout on the Ethereum mainnet will pan out. The risk of nodes facing challenges that will take time to resolve increases uncertainty around the upgrade.
Large wallet investors on the Ethereum network continue to accumulate Liquid Staking tokens ahead of the upgrade.
Ethereum’s Shanghai upgrade has not yet increased selling pressure on altcoins, however holders cannot ignore the risk of selling and macro uncertainty surrounding the upgrade. Uncertainty is driving traders to risk aversion, which is reflected in the weekly implied volatility (IV) chart.
Analysts at Blofin Academy believe that investor expectations are relatively stable. Ethereum options traders remain bullish on the outlook, with the upcoming US CPI data adding to macro uncertainty around key upgrades.
