Ethereum’s Shapella upgrade is set to roll out on April 13th at around 12:27 a.m. CET – a highly anticipated event that will enable withdrawals of staked Ether on the deposit contract for the first time since the Beacon Chain launch in December 2020.

The upgrade is good news for long-term validators, especially solo stakes that locked their 32 Ether deposit withdrawal indefinitely, who will be able to move their funds. However, the effect of such a large amount of ETH becoming liquid has caused concerns among market participants and analysts, who fear the event might cause selling pressure.

But according to Glassnode, this sell-side pressure might not materialise. Even if validators withdrew the maximum amount of rewards and staked ETH, the impact on the asset’s price will be minimal, researchers said in a newsletter.

ether withdrawals glassnode
Ether withdrawals of sales simulation. Source: Glassnode

On April 11, Glassnode analysts said:

We project that only 100k ETH ($190 million) of the total accumulated rewards will be withdrawn and sold. Furthermore, we expect to see twice as many validators exiting, but only a limited amount of stake will be released per day. We believe only a fraction of that amount, around 70k ETH ($133M), will actually become liquid.

The report also highlighted that approximately half the total amount staked is currently underwater – something that might lower the inclination to withdraw and sell.

There are currently 1,299 validators in queue waiting to exit the network, and 214 validators that have been forced out. Once withdrawals are enabled, at least 47,167 ETH, worth around $86 million will be immediately withdrawn.

Taking further full and partial withdrawals into account, and the fact that 75% of depositors are currently at a loss, the analysts guesstimate that the market impact will not be as significant as many might believe.

“It is arguably more likely that the technical delivery of the upgrade will bolster a growing staking industry, which seeks to better serve holders of Ether over the long-term,” they said.

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