Ethereum’s Shapella Upgrade: Will it Impact Market Price?

• Ethereum is set to upgrade its network with the Shapella update on April 12, 2023.
• There are speculations about the potential impact of the upgrade on ETH’s market price.
• Most of the ETH staked on Beacon Chain are locked in late 2020 and 2021, suggesting that selling pressure from the Shapella update may be lower than expected.

Ethereum’s Upcoming Network Upgrade

Ethereum is gearing up for one of its most significant upgrades since “The Merge,” a move that will see it transition to a proof-of-stake consensus protocol. Scheduled for 22:27:35 UTC on April 12, 2023, this update is known as the Shapella update.

Impact On The Market Price

There have been speculations about what effect this upgrade might have on Ethereum’s market price. As of now, ETH has been rallying and looks poised to break into the $2,000 region soon. However, when a similar upgrade happened previously, it was followed by a dip in prices and a decline into critical support zones.

ETH Staked On Beacon Chain

After launch of Shapella update, users can withdraw their stake ETH from the Beacon Chain – the platform that initially supported Proof-of-Stake migration. Crypto analysis firm CryptoQuant has looked into Lido and other platforms to gauge sentiment from retail investors around this event. It appears that most of these millions of ETH were staked at a loss during late 2020/2021 when Ethereum rallied from below $100 to an all-time high north of $4,000; therefore it is unlikely they will be dumped following this upgrade due to fear of further losses.

“Smart Money” & The Options Sector

Crypto analysts have also looked into “smart money” and options markets to understand how big players view this event and its potential impacts on Ethereum’s price trend after launch. They found out that large investors seem likely to hold onto their positions despite possible losses while retail investors appear more likely to follow suit as long as they don’t incur further losses by dumping their holdings post-upgrade.

Conclusion

It appears that Ethereum’s upcoming Shapella update could result in less selling pressure than expected due to most investors having already locked in losses prior to this event happening; however only time will tell if these predictions come true or not once April 12th comes around!