As the launch of the Ethereum Shanghai Upgrade draws near, investors are beginning to get more nervous as they are unsure whether the upgrade could result in a positive or negative move from Ethereum. On February 22, Nansen, an on-chain-based analytics platform revealed some key factors Ethereum investors should know before the Shanghai upgrade commences.

These key factors were released in a series of tweets on Twitter and included key points such as the total amount of ETH deposited and top stakers, prices at major ETH deposits, and selling pressure on ETH from unstakers after the Shanghai upgrade launch. 

The Shanghai upgrade also known as ‘Shapella’ is a hard fork for the Ethereum network slated to launch on February 28, 2023. After the transition of Ethereum to a Proof of Stake mechanism last September, validators became an important part of the ecosystem. 

A total of 32 ETH is required to be a validator on the Ethereum network. However, with platforms such as Lido, investors could stake lesser than 32 ETH and still be a validator on the network. The Shanghai upgrade will enable the withdrawal of staked ETH from the Ethereum Beacon chain. 

Illiquid Stakers To Determine Selling Pressure

According to data from Nansen, the Ethereum blockchain currently has a total of 16.8 million ETH deposited to the network. Out of the total amount, liquid staking platform, Lido Finance accounts for 29.5% of the figure while other platforms such as Coinbase, Kraken, and Binance account for only 26% combined.

Nansen noted with Lido holding a huge amount of total staked ETH, it has a crucial role to play and must be therefore sufficiently decentralized so as to shield the ecosystem from any centralized censorship wrath.

Furthermore, while the aftermath of the Shanghai launch might be uncertain, Nansen suggested the price ranges of when the major ETH deposits happened is crucial to the occurrence of mass withdrawal as it will determine the profit margin of depositors by the time the Shanghai upgrade deploys. 

Nansen’s on-chain data shows that the average deposit prices for ETH are roughly $600 resulting in an initial deposit spike, followed by consistent deposits until the $3,400 price level.

While revealing the notable details, Nansen mentioned the illiquid stakers on the Ethereum network are likely to sell their holdings when withdrawals begin after the Shanghai upgrade, therefore, influencing the Ethereum market significantly. This category of stakers is responsible for 24.5% of all the staked ETH which amounts to approximately 4.1 million ETH, equivalent to $6.9 billion. 

ETH Price Action Before The Shanghai Launch 

Over the past 24 hours, ETH has moved in a bullish trend up by 1.8% after a slight retracement from yesterday. Furthermore, ETH has been in an uptrend since the beginning of the year along with other altcoins in the market. 

The cryptocurrency has rallied significantly by more than 40% moving from a ranging $1,100 late last year to trading above $1,600 as of today. However, despite the continuous uptrend, ETH is still 65% down from its all-time high of $4,878 seen on November 2021.