After the upgrade of Shanghai, all parties have different views on the future trend of ETH

Original: “After the Shapella upgrade, industry experts have mixed opinions on the subsequent trend of Ethereum”

Written by Mary Liu, BitpushNews

The crypto community’s long-awaited Ethereum Shapella upgrade is finally complete.

As of 6:30 AM Beijing time on April 13, Ethereum was trading at $1,917, with a volatility of 1.25% in the past 24 hours, fluctuating in a narrow range of $1,863.37 and $1,927.35, with little change in the market. Traders are still analyzing what will happen when the 18 million staked ETH finally hits the market.

Some observers expect the price of Ethereum to plummet after the upgrade as users liquidate their holdings, while others believe that the expected rise in selling pressure has been priced in and that the market will rebound after the upgrade is completed by the classic “Buy the Rumor, Sell the News.”

The selling pressure will be priced in very quickly

A report by blockchain analytics firm Glassnode said that there could be about $300 million in ETH selling pressure after Ethereum’s Shanghai upgrade, which may sound like a lot, but according to Glassnode, this selling pressure can be absorbed quickly, with analysts saying, “Even in the extreme case of withdrawing and selling the maximum amount of rewards and staking, the seller’s trading volume is still less than the average weekly inflow of the exchange.” Therefore, the conclusion is that even the most extreme cases can have an acceptable impact on the price of ETH. 」

According to Glassnode, only 70,000 ETH (about $133 million) “will actually become liquidity” because the Ethereum protocol has a limit on the amount of ETH that can be unlocked for staking per day.

According to Blockworks Research, as of midday ET on Wednesday, only 1.3% of Ethereum validators, or 2,400 people, said they had exited blockchain staking. “This may indicate little to no willingness to quit, or that most people are waiting until after the upgrade,” Blockworks Research wrote.

A number of industry experts, including Galaxy Digital, have recently said that the selling pressure on some withdrawals will dissipate within a few days.

In a note released earlier this month, Galaxy Digital analysts said: “We expect to sell 553,650 ETH. Amortized over 7 days, this equates to about 1% of ETH trading volume (including spot and perpetual contract volumes) per day for a week, and our view is between no impact ~ slightly bearish based on the broad risk environment and overall liquidity of Ethereum during the Shanghai upgrade”.

Robert Ellison, chief growth officer at crypto custody and staking platform Allnodes, told Coindesk: "There is simply no reason or sentiment to rush out of ETH because most stakeholders are optimistic about Ethereum’s long-term viability and see it as a long-term commitment… The number of validators waiting to be activated is currently exceeding the exit queue. Any short-term volatility will be very short-lived, largely due to commitments from institutions like Kraken, which they have had to due to regulatory issues. Even in the event that an institution like Kraken cancels a staking service, these stakeholders move to other services like Allnodes or Rocketpool. 」

Falling below $1,700 in two weeks?

QCP Capital said the situation is not optimistic, and its team said in a Telegram update: We don’t see what the bullish picture for this event is, as those at the front of the line may sell spot, while those at the back of the line will hedge with perpetual contracts/futures if they haven’t already done so. In anticipation of this event, the bears have already started to act, and ETH has underperformed BTC in recent weeks. ETH/BTC broke above the key support level of 0.658 and is likely to return to 0.0553 as spot selling pressure persists in an already illiquid market in the days following further bearish price action by Shapella, which could also weigh on the broader market."

Henry Elder, head of decentralized finance at Wave Digital Asset, believes that the upgrade is a “sell news” event for governance tokens of liquidity staking solutions such as Ethereum and Lido, which have been rising since early January in anticipation of a hard fork.

Ethereum was trading near $1,910 at press time, up about 60% year-to-date, according to data from the Bitui terminal. Lido Finance’s governance token, LDO, is up 26% since the start of the year, with Lido the largest liquid staking protocol with around $8.4 billion in staked Ethereum on its platform and rival Rocket Pool’s RPL up 70% since January.

• “We should expect the withdrawal queue to fill up immediately and for weeks,” Elder said. This looks like a fulfillment of the ‘supply overflow’ narrative and the market is likely to sell off. 」
• Elder added, "The majority of withdrawals are likely to come from early individual stakers who are now looking to move to liquid staking solutions, and early users of the now dominant staking solution who are looking to move to minority staking solutions to increase decentralization. 」
• Laurent Kssis, a crypto trading advisor at CEC Capital, said in his tweet that Ethereum had risen before the upgrade event and could be under pressure after a successful implementation of the upgrade.
• Kssis said, “Traders were ‘buying’ before the Shanghai upgrade event, and if the upgrade is successful, they will sell ETH in the market.” Kssis predicts that traders will sell their ETH after the upgrade, and ETH could fall below $1,700 in two weeks as investors take profits.

Although Ethereum has achieved double-digit gains this year, it has performed nowhere near market leader Bitcoin, which is up more than 70% this year.

Short-term and long-term trends are different, with Matt Lason, chief investment officer at crypto hedge fund Globe 3 Capital, saying in his blog that although the ETH price may fall, it should be temporary and not as severe as some predict. Lason said he expects ETH to reach $3,300 by the end of the year, citing increased institutional demand for the asset.

According to a February survey by crypto hedge fund firm Nickel Digital Asset Management, two-fifths of the 200 institutions surveyed have a total of $2.85 trillion in assets under management, and the price of Ethereum is expected to exceed $2,000 by the end of the year.