The Ethereum Shapella upgrade has been live for a little over a week now. Thus, initial network metrics provide some insight into ecosystem performance and current state.
Analysts predicting that Shapella would have little impact on valuations were mostly proven correct, although some market participants were still proven wrong.
The network has partially or fully distributed more than 1.3 million ETH ($2.52 billion) — a sharp increase from last week’s $617 million, the data showed.
According to research firm K33, roughly two-thirds of these withdrawals included rewards from previous validator tasks explain in a recent analysis. These rewards are distributed automatically. For full withdrawal validators, there will be an exit queue that limits the withdrawal rate. This ensures that the PoS network remains secure even when it needs to leave.
Analyst Matt Fiebach said shortly before Shapella went live that a total of $34 billion in ETH staking had become more liquid, with minimal impact on price.
The analyst noted that the abundance of related derivatives available allows ETH stakes to be hedged before unlocking.
Katie Talati, head of research at cryptocurrency-focused asset manager Arca, also said at the time that she expected little impact from seller pressure due to constraints on exiting validator queues.
This coincides with the statement of CEO Rich Falk-Wallace, who has a research background in Arcana. Assuming maximum validator outflow, Falk-Wallace estimates that it will take more than 2 years for the number of validators to drop from the current 536,000 to 100,000.
However, this is not necessarily the case, as it is also possible that more validators will join the network. In the past 7 days, the number of validators has increased to around 18,000. As more validators leave, staking rewards increase, which acts to establish balance.
The initial impact on price was positive, as ETH quickly rose to new highs above $2,100 on April 16 – not seen in nearly a year.
While a market correction threatens to wipe out much of this month’s gains, near-term volatility forecasts have proven mostly correct.
Some traders admitted that their pessimistic predictions about the impact of the escalation failed, such as the prominent Twitter pundit. Kamikaze It has now turned “bullish”.Just a few days ago, the self-proclaimed analyst forecast A “death spiral” for this property.
For a while, Kamikaz was involved in a long-running feud with North Rock Digital’s Hal Press over the short- and long-term direction of ETH.
Before the upgrade, Press was forecast At the end of March, the price of ETH against BTC will reach around 0.08 ETH/BTC. This level is not too far as the price peaked at 0.07 ETH/BTC 5 days after the upgrade went live.
ETH/BTC is an exchange trading pair that represents the ratio of ETH to Bitcoin. Traders and investors use it to speculate on the relative strength of two assets.
While ETH is currently still within the long-term range set in May 2021, Press’ post-Shapella price target prediction may remain unconfirmed, suggesting a high correlation between the two top cryptocurrencies.
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According to Blockworks