Nansen Lists Key Indicators Ahead of Ethereum’s Shanghai Upgrade
Nansen, the on-chain analytics platform, has released an update on what investors should look for ahead of the Ethereum Shanghai upgrade. 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.
4/ Currently, 24.5% of all staked ETH belongs to illiquid stakers that are in profit, totaling approximately 4.1M ETH ($6.9B).
This is arguably the category most likely to sell when withdrawals are enabled at the Shanghai upgrade. pic.twitter.com/MVjIJuPpqL
— Nansen 🧭 (@nansen_ai) February 22, 2023
Shanghai, also known as Shapella, is an upgrade on the Ethereum network that will allow network validators to withdraw staked ETH. It is a new feature not enabled during the transition to a Proof-of-Stake (PoS) consensus. The Shanghai upgrade, scheduled for February 28, 2023, by Ethereum developers, will happen on the Sepolia test network at epoch 56832.
Based on data collected from its platform, Nansen notes that there are 16.8 million ETH currently deposited on the Ethereum network. Of this total amount, Lido has the highest deposit and claims 29.5% of the lot. Coinbase, Kraken, and Binance follow Lido with a combined 26% deposit.
According to Nansen, Lido’s status as the biggest staking provider is crucial, and a platform with such a reputation must become sufficiently decentralized. That will enable the ecosystem to become more resistant to censorship.
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.
Nansen’s 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.