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Ethereum on-chain data suggests ETH sell pressure could be a non-event after the Shanghai upgrade

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A recent Binance report details the status of Ether staking and explores why the Shanghai upgrade may not result in the ETH sell pressure some traders have predicted.

The upcoming Ethereum Shanghai hard fork is slated to occur in March 2023, and the upgrade will cap off the network’s move to proof-of-stake (PoS), which started during the Merge on Sept. 15, 2022. Once Shanghai is implemented, previously locked Ether (ETH) will gradually become liquid for the first time since December 2020.

According to on-chain Etherscan data, over 16.6 million ETH is currently locked in the PoS staking protocol, which was valued at $28 billion on Feb. 16, 2023. Ethereum’s move from proof-of-work (PoW) to PoS has started to achieve the original goal, which was to make Ether’s supply deflationary. In the 154 days since the Merge, over 24,800 ETH has been burned to make the token 0.05% deflationary on a yearly basis.

Key Ether stats since the Merge. Source: Ultra sound money

On. Feb. 16, the total Ether supply sits at 120 million, meaning that a little over 10% of the supply will be unlocked, with yield rewards starting with the Shanghai update.

Let’s explore what on-chain metrics can help identify what may happen during the Shanghai upgrade.

A portion of locked ETH is liquid thanks to liquid staking derivatives

In order to benefit from yield rewards before the Shanghai update, investors had to lock their ETH and run a reliable node. The minimum staking requirement of 32 locked ETH is entirely illiquid, meaning traders had limited utility options for these coins.

Liquid staking derivatives (LSD) allow users to benefit from staked Ether while retaining the ability to sell the derivative token received on the secondary market. The LSD protocols took a fee and locked the native Ether, giving users another token that represents a stake in the pool.

Liquid staking derivatives did not gain prominence until Lido and other protocols began to see a rush of cash flow after the Merge. Since Ether staking began, liquid staking has surpassed illiquid staking. As of Feb. 13, 57% of staked Ether is liquid versus 43% illiquid.

40db3048-1c88-479c-9fd3-a652e4eaebb5.pngLiquid vs. illiquid staking. Source: Binance

Since a majority of the locked Ether is through LSD, investors currently have access to liquidity, which could reduce sell pressure post-Shanghai.

Very few stakers are in profit

Back in December 2020 when Ether staking opened, the price of Ether ranged from $400 to $700. Conversely, many investors began staking when Ether was near its all-time high of $4,200. According to Binance:

“We note a sizable amount of ETH (around 2M) was staked at prices in the US $400–700 range — this represents the earliest stakers in Dec 2020 — a group that is likely illiquid given that liquid staking was far less known at the time.”

Because of Ether’s 69% correction since hitting an all-time high, many of the investors who staked their Ether are currently at an unrealized loss.

b564658c-89bd-40f5-8b1e-9d5dfa9a403d.pngPrice when staking occurred. Source: Binance

The minority of stakers who are in profit are likely to be strong believers in the Ethereum network since the date for liquidity was still unknown at this time. With a large number of stakers at a loss and those who are profitable likely to be long-term investors, Ether’s price may not see a massive dump when the tokens are able to be unstaked.

Lido overtakes solo stakers

On Jan. 2, 2023, Lido officially overtook MakerDAO as the highest total value locked in decentralized finance. As of Feb. 13, Lido is also the largest staking entity in Ether. With over 5 billion ETH staked in Lido, the protocol represents 29.2% of all entities. Notably, almost 30% of all stakers have the option for current liquidity through Lido.

Solo stakers who run nodes took a risk to run nodes from home or with a small group. Solo stakers likely believe that Ether is a long-term currency since nodes carry cost and risk. Solo stakers currently make up 24.9% of all stakers.

68c3938a-4a62-4e1a-b1c3-0c51e7bb3631.pngStaked Ether by entity. Source: Binance

With nearly 55% of all staked Ether being held by either solo stakers or Lido, the risk of an Ether price dump may be reduced.

While the on-chain data surrounding the Shanghai fork may be bullish for the Ethereum network, some analysts are still predicting the potential for a sharp downside in Ether’s price.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Source

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  • 14.10.25 08:46 robertalfred175

    CRYPTO SCAM RECOVERY SUCCESSFUL – A TESTIMONIAL OF LOST PASSWORD TO YOUR DIGITAL WALLET BACK. My name is Robert Alfred, Am from Australia. I’m sharing my experience in the hope that it helps others who have been victims of crypto scams. A few months ago, I fell victim to a fraudulent crypto investment scheme linked to a broker company. I had invested heavily during a time when Bitcoin prices were rising, thinking it was a good opportunity. Unfortunately, I was scammed out of $120,000 AUD and the broker denied me access to my digital wallet and assets. It was a devastating experience that caused many sleepless nights. Crypto scams are increasingly common and often involve fake trading platforms, phishing attacks, and misleading investment opportunities. In my desperation, a friend from the crypto community recommended Capital Crypto Recovery Service, known for helping victims recover lost or stolen funds. After doing some research and reading multiple positive reviews, I reached out to Capital Crypto Recovery. I provided all the necessary information—wallet addresses, transaction history, and communication logs. Their expert team responded immediately and began investigating. Using advanced blockchain tracking techniques, they were able to trace the stolen Dogecoin, identify the scammer’s wallet, and coordinate with relevant authorities to freeze the funds before they could be moved. Incredibly, within 24 hours, Capital Crypto Recovery successfully recovered the majority of my stolen crypto assets. I was beyond relieved and truly grateful. Their professionalism, transparency, and constant communication throughout the process gave me hope during a very difficult time. If you’ve been a victim of a crypto scam, I highly recommend them with full confidence contacting: 📧 Email: [email protected] 📱 Telegram: @Capitalcryptorecover Contact: [email protected] 📞 Call/Text: +1 (336) 390-6684 🌐 Website: https://recovercapital.wixsite.com/capital-crypto-rec-1

  • 15.10.25 18:07 crypto

    Cryptocurrency's digital realm presents many opportunities, but it also conceals complex frauds. It is quite painful to lose your cryptocurrency to scam. You can feel harassed and lost as a result. If you have been the victim of a cryptocurrency scam, this guide explains what to do ASAP. Following these procedures will help you avoid further issues or get your money back. Communication with Marie ([email protected] and WhatsApp: +1 7127594675) can make all the difference.

  • 15.10.25 21:52 harristhomas7376

    "In the crypto world, this is great news I want to share. Last year, I fell victim to a scam disguised as a safe investment option. I have invested in crypto trading platforms for about 10yrs thinking I was ensuring myself a retirement income, only to find that all my assets were either frozen, I believed my assets were secure — until I discovered that my BTC funds had been frozen and withdrawals were impossible. It was a devastating moment when I realized I had been scammed, and I thought my Bitcoin was gone forever, Everything changed when a close friend recommended the Capital Crypto Recover Service. Their professionalism, expertise, and dedication enabled me to recover my lost Bitcoin funds back — more than €560.000 DEM to my BTC wallet. What once felt impossible became a reality thanks to their support. If you have lost Bitcoin through scams, hacking, failed withdrawals, or similar challenges, don’t lose hope. I strongly recommend Capital Crypto Recover Service to anyone seeking a reliable and effective solution for recovering any wallet assets. They have a proven track record of successful reputation in recovering lost password assets for their clients and can help you navigate the process of recovering your funds. Don’t let scammers get away with your hard-earned money – contact Email: [email protected] Phone CALL/Text Number: +1 (336) 390-6684 Contact: [email protected] Website: https://recovercapital.wixsite.com/capital-crypto-rec-1

  • 15.10.25 21:52 harristhomas7376

    "In the crypto world, this is great news I want to share. Last year, I fell victim to a scam disguised as a safe investment option. I have invested in crypto trading platforms for about 10yrs thinking I was ensuring myself a retirement income, only to find that all my assets were either frozen, I believed my assets were secure — until I discovered that my BTC funds had been frozen and withdrawals were impossible. It was a devastating moment when I realized I had been scammed, and I thought my Bitcoin was gone forever, Everything changed when a close friend recommended the Capital Crypto Recover Service. Their professionalism, expertise, and dedication enabled me to recover my lost Bitcoin funds back — more than €560.000 DEM to my BTC wallet. What once felt impossible became a reality thanks to their support. If you have lost Bitcoin through scams, hacking, failed withdrawals, or similar challenges, don’t lose hope. I strongly recommend Capital Crypto Recover Service to anyone seeking a reliable and effective solution for recovering any wallet assets. They have a proven track record of successful reputation in recovering lost password assets for their clients and can help you navigate the process of recovering your funds. Don’t let scammers get away with your hard-earned money – contact Email: [email protected] Phone CALL/Text Number: +1 (336) 390-6684 Contact: [email protected] Website: https://recovercapital.wixsite.com/capital-crypto-rec-1

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