Nansen, the on-chain analytics platform, has recently released an update on what investors should look for ahead of the Ethereum Shanghai upgrade. Scheduled for February 28, 2023, the Shanghai upgrade is an upgrade on the Ethereum network that will allow network validators to withdraw staked ETH. This is a new feature not enabled during the transition to a Proof-of-Stake (PoS) consensus.
In a Twitter thread, Nansen expounded on the total ETH deposited, prices at ETH deposits, and the ETH selling pressure as the three crucial factors to affect the Ethereum market after the Shanghai upgrade. According to Nansen, there are currently 16.8 million ETH deposited on the Ethereum network. Of this total amount, Lido has the highest deposit and claims 29.5%. Coinbase, Kraken, and Binance follow Lido with a combined 26% deposit.
Nansen considers the price ranges for the highest ETH deposits crucial leading to withdrawal activation. It will determine the profit margin of depositors by the time the Shanghai upgrade deploys. From Nansen’s on-chain data, the average deposit prices for ETH are approximately $600 for the initial spike, followed by consistent deposits until the $3,400 price level.
The next critical indicator that could influence the market trend at the Shanghai upgrade is the fraction of illiquid stakers on the Ethereum network. Currently, this category of stakers is responsible for 24.5% of all the staked ETH. That amounts to approximately 4.1 million ETH, equivalent to $6.9 billion. These are the stakers that Nansen thinks will most likely sell their holdings when withdrawals begin after the Shanghai upgrade.
Nansen believes that Lido’s status as the biggest staking provider is crucial, and a platform with such a reputation must become sufficiently decentralized. This will enable the ecosystem to become more resistant to censorship.
The Shanghai upgrade is an important event in the Ethereum network as it will enable network validators to withdraw their staked ETH. This is a new feature that was not enabled during the transition to a Proof-of-Stake (PoS) consensus. The upgrade is scheduled for February 28, 2023, and will happen on the Sepolia test network at epoch 56832.
Nansen has identified three key indicators that investors should look for ahead of the Ethereum Shanghai upgrade. These are the total ETH deposited, prices at ETH deposits, and the ETH selling pressure. Nansen believes that these three factors will affect the Ethereum market after the Shanghai upgrade.
The total ETH deposited is important as it will determine the amount of ETH that will be available for withdrawal. Nansen’s on-chain data shows that Lido has the highest deposit and claims 29.5%. Coinbase, Kraken, and Binance follow Lido with a combined 26% deposit.
The prices at ETH deposits are also important as they will determine the profit margin of depositors by the time the Shanghai upgrade deploys. From Nansen’s on-chain data, the average deposit prices for ETH are approximately $600 for the initial spike, followed by consistent deposits until the $3,400 price level.
Finally, Nansen believes that the fraction of illiquid stakers on the Ethereum network is the most important indicator. Currently, this category of stakers is responsible for 24.5% of all the staked ETH. That amounts to approximately 4.1 million ETH, equivalent to $6.9 billion. These are the stakers that Nansen thinks will most likely sell their holdings when withdrawals begin after the Shanghai upgrade.
In conclusion, the Ethereum Shanghai upgrade is an important event in the Ethereum network. Nansen has identified three key indicators that investors should look for ahead of the upgrade. These are the total ETH deposited, prices at ETH deposits, and the ETH selling pressure. Nansen believes that these three factors will affect the Ethereum market after the Shanghai upgrade.
