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

cointelegraph.com:

The Ethereum Foundation has announced April 12 as the date of deployment of the much-anticipated Shanghai and Capella upgrade, together dubbed as Shapella.

The upgrades will enable withdrawals from Ethereum 2.0 staking contracts. The staking contract was first launched in December 2020. It only accepted one-way deposits of ETH, which will change after the upgrade.

To date, users have deposited over 18 million ETH, worth around $32.5 billion, into the Ethereum staking contract at varying times since December 2020.

Most users opted for liquid staking derivatives on decentralized or centralized exchanges. Because these stakers are already liquid, there will likely be no new reason to sell after the Shapella upgrade.

Decentralized LSD platforms like Lido currently account for around 33.2% of the total ETH deposits on the beacon chain. Out of the rest, around 27.1% is deposited via centralized exchanges like Coinbase, Binance and Kraken. Thus, 60.3% of the staked ETH is deposited via liquid staking mediums.

On the other hand, the illiquid ETH, which is deposited into the contracts directly by setting up nodes or third-party service providers, accounts for around 40% of the total amount. These are most likely to sell after unlocking.

According to analysis from Nansen, around 59% of the illiquid deposits, between 3.62 million and 4 million ETH, are in profit. These users are most likely to go through partial or complete withdrawals after the withdrawals are enabled.

Some of the illiquid stakers might also choose to re-stake and the Nansen report estimated total selling pressure to be somewhere between 1.2 million and 3 million ETH. However, all ETH will not be dumped into the market right away.

The Shapella upgrade will implement a