Shanghai upgrade

Less than 1% of staked ETH estimated to sell after Shanghai upgrade: Glassnode

The analytics firm backed up its prediction, stating only 253 validators have signed up to fully exit their staked Ether position.

Just 170,000 Ether (ETH) of the total 18.1 million ETH staked on the Beacon Chain will be unlocked within the first week of the Shanghai hard fork being executed on Ethereum, Glassnode has predicted.

The figure comprises 100,000 Ether ($190 million) worth of staking rewards and 70,000 ETH worth of staked Ether ($133 million), the on-chain intelligence platform predicted in its April 11 report.

Glassnode backed up its prediction by explaining that only 253 depositors are waiting to exit their stake and that a few mechanisms are in place to prevent a flood of Ether supply from hitting the market all at once.

The 253 exiting depositors own a total of 1,229 validators, while another 214 slashed validators will be forced out as soon as Shanghai is activated on Ethereum, with Glassnode confident the hard fork will not have a “dramatic” impact on Ether’s price action:

“Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume.”

“Therefore, we conclude that even the most extreme case will have an acceptable impact on the price of ETH,” the firm added.

Data shared by Glassnode found that only 22% of the 253 exiting depositors are currently in profit too.

The types of organizations, size, age and profitability of each of the 253 exiting Ethereum validators. Source: Glassnode

Glassnode expects a large amount of Ether to be withdrawn from the crypto exchange Kraken after the legality of its staking services was challenged by the United States Securities and Exchange Commission.

It also anticipated that crypto lending platform Celsius may withdraw a large amount to sell its staked Ether as part of its bankruptcy proceedings.

However, it is unlikely that Kraken and Celsius will make these withdrawals as soon as Shanghai is activated, it said.

Approximately 11.2% of the Ether staked on the Beacon Chain is operated by Kraken’s staking service. Source: Glassnode

The average deposit price across all staked ETH is $2,136, down 12.7% from Ether’s current price of $1,865, which equates to a net unrealized loss of $4.7 billion, Glassnode said:

“After the peak unrealized loss of $16B in July 2022, the net unrealized loss now amounts to $4.7B. It is mainly carried by the Whale sized depositors, who hold a 76% share of the unrealized losses.”

Global financial firm Fidelity Investments is also of the view that Shanghai won’t have too much of an impact on Ether’s price action.

Related: Ethereum price turns bullish ahead of next week’s Shanghai and Capella upgrades

It said in an April 5 report that “selling pressure will be muted due to the likelihood of partial withdrawals being re-staked as well as the length of time the withdrawals will take.”

The Shanghai upgrade is set to take effect on April 12 at 10:30 pm UTC, according to blockchain infrastructure firm Blocknative.

The unlocking of staked Ether will be enabled by Ethereum Improvement Proposal-4895.

Of the five EIPs that will be activated by Shanghai, it is by far the most anticipated one, as it will move Ethereum one step closer to a fully functional proof-of-stake system.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide

3 reasons why Ethereum price can reach $3K in Q2

Ethereum on-chain and technical indicators show a long-term bullish argument for ETH price in the near to medium terms.

Ethereum’s native token, Ether (ETH), eyes a run-up toward $3,000 in Q2 2023 after wrapping the previous quarter with 55% gains.

ETH price nears potential breakout

The price of Ether has more than doubled after bottoming out in June at around $880, weathering a slew of negative events, including the collapse of FTX, interest rate increases, and stricter U.S. regulations.

In doing so, ETH/USD has painted an ascending triangle, confirmed by its rising trendline support and horizontal level resistance. The pattern suggests aggressive buying as lows get steadily higher while highs stay around the same level, indicative of a higher selling pressure at the given level. 

As of April 2, ETH’s price is testing its horizontal level resistance range ($1,700-1,820) for a potential breakout move.

ETH/USD three-day price chart featuring an “ascending triangle” bottom setup.

A breakout will be confirmed if the price closes above the resistance range while accompanying higher volumes. Furthermore, the ascending triangle breakout target is measured with its length equal to the triangle height.

In other words, the bullish ETH price target is in the $3,350-3,900 range, depending on where traders see the triangle’s rising trendline support, as shown by the T1 and T2 in the chart above. This would suggest 80% gains by June.

Conversely, a pullback from the $1,700-1,820 range risks delaying the upside setup and resulting in a broader price correction.

Ethereum whale accumulation remains strong

From an on-chain perspective, Ether’s short-term and long-term trends look skewed toward the bulls.

Most Ethereum whale cohorts have increased their ETH accumulation in recent weeks, according to the latest data from Santiment. For instance, the supply of Ether held by addresses with a 1,000-10,000 ETH balance (blue in the chart below) has grown by 0.5% in March.

Ether supply distribution among investors holding at least 1,000 ETH. Source: Santiment 

Similarly, the 1 million-10 million ETH (brown) and the 10 million – 100 million ETH balance cohorts have witnessed 0.4% and 0.5% rises, respectively. 

The growth appeared amid what appears to be the absorption of selling pressure introduced by the 100,000-1 million ETH (pink) and 10,000-100,000 ETH (orange) address cohorts.

At the same time, the growth could attributed to the network’s proof-of-stake contracts — directly or by using third-party stakers such as Lido DAO (LDO).

Ethereum 2.0 total value staked [in ETH]. Source: Glassnode

The net Ether deposited at the official Ethereum 2.0 address crossed above 18 million ETH after rising about 3.5% in March.

Related: Analysts debate the ETH price outcomes of Ethereum’s upcoming Shapella upgrade

The deposits have grown ahead of Ethereum’s Shanghai and Capella upgrades on April 12, which will enable stakers to withdraw ETH from the PoS smart contract. Currently, this is not possible.

MVRV Z-Score: Ethreum price bottom reversal

More bullish arguments stem from Ethereum’s MVRV Z-Score entering a stage that has previously preceded long-term ETH price rallies.

Ethereum MVRV-Z Score. Source: Glassnode

The MVRV Z-Score assesses when Ethereum is overvalued and undervalued relative to its “fair value.” As a rule, the MVRV Z-score indicates a market top (red zone) when market value rises above realized value, while the opposite indicates market bottoms (green zone).

Ether’s previous price recoveries coincide with its MVRV Z-Score bouncing from the green zone, suggesting the same could happen over the next three months.

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.

Vitalik Buterin highlights what he’s bullish about for 2023

The Ethereum co-founder expects to reach a new milestone for rollups this year.

Ethereum co-founder Vitalik Buterin has shared some bullishness for the year ahead, including reaching a new milestone for rollup scaling as per the Ethereum roadmap.

The Ethereum developer also confirmed the rollout of the Ethereum Improvement Protocol (EIP) 4884 sometime in 2023, which had been removed as part of the upcoming Shanghai upgrade package set for March.

Responding to a Dec. 31 post from former chief technology officer of Coinbase, Balaji Srinivasan, asking users what they were bullish for in 2023, Buterin said he was looking forward to reaching the “basic rollup scaling” milestone as outlined in the Ethereum roadmap.

He explained that this meant the rollout of The Surge-related Ethereum Improvement Proposal (EIP)-4884.

EIP-4884 was initially expected to be packaged in with Shanghai, introducing “proto-danksharding” to significantly enhance layer-2 rollup scalability, the Surge, ahead of the full implementation of the major Sharding upgrade late next year.

He also said that this would mean that rollups would be “partially taking off training wheels, at least to stage 1,” referring to a Nov. 22 post on the “Ethereum Magicians forum,” which describes three stages of the “trust model” based on how mature a project’s tech was.

Stage 0, which Buterin likens to having “full training wheels,” has the requirements for all transactions to be on-chain and provide users the ability to withdraw their assets without the operator.

Stage 1, or “limited training wheels,” must have a transaction verification method such as a fraud proof or validity proof scheme to accept or reject which transactions are allowed by the smart contract, along with an overriding security council to oversee the process. 

While stage 2 has “no training wheels” and must have two distinct fraud provers, two distinct validity provers, or one of each. Upgrades are allowed at this stage but must have a delay of more than 30 days.

Related: Vitalik reveals a new section in the Ethereum roadmap: The Scourge

In a separate Twitter post one day earlier on Dec. 30, Buterin also made some comments on what he believes a “Good Crypto Future” might look like.

Buterin outlined several areas of crypto that would need to be fixed, including scaling, privacy, user experience and making user accounts more secure for average users than centralized services.

He also sees payments and decentralized finance (DeFi) being part of this future, and new organizational paradigms powered by decentralized autonomous organizations (DAOs).