The much-awaited Shanghai upgrade is a few days away and the ETH price appears to be preparing for a pre-rally at the moment. The price has surged beyond $1800 as the fresh bullish push raised the levels higher. However, the possibilities of a pullback continue to haunt but the lower support at $1737 appears to be much stronger to handle bearish pressure.
What to Expect From the ETH Price Post the Upgrade?
As per the data from Dune analytics, nearly 16.3 million Ethereum has been staked on the network which currently remains locked until the upgrade. The Shanghai upgrade which is scheduled on April 12, 2023, will enable the withdrawals of these staked tokens. With this, the experts believed the risk of holding the staked versions of ETH may reduce which includes Lido’s stETH and Frax’s frxETH as they become redeemable.
Will It Create a Massive Selling Pressure?
After the upgrade, a mixed reaction to the prevailing query may be expected. As some of the investors are expected to cash out on their staking positions and exit from the beacon chain. While some may continue to stake with liquid staking depravities (LSD) to earn more yields. Besides, the maximum withdrawals permitted per day is around 50,400 ETH which is negligible compared to the everyday volume of the token.
Therefore, chances of mounting a hefty selling pressure currently appear negligible. Conversely, Ethereum is now deflationary which means buying pressure will be more than selling pressure. If the validators continue to exist, it may increase the buying pressure and eventually draw more investors.
What May Be the Impact on the LSD Tokens?
The announcement of the Shanghai upgrade has soared the prices of LSDs like Lido, Frax shares, and Rocket pool. After the upgrade, the users will be able to stake easily through LSDs which may further boost the Total value locked (TVL) and the entire platform. However, it may also make validator lose their staking rewards leaving the LSDs relevant.
Also, external factors like regulation within the centralized exchanges may promote withdrawals from these exchanges. Therefore, the users may expect a more bullish run post to the Shanghai upgrade as the probability of a bearish outlook remains low at the moment.