Following news of a successful Shanghai upgrade, Ethereum is on the up.
The Second-largest cryptocurrency by market capitalization has seen a 6% surge in the last 24 hours, with ETH trading at approximately $1,980, according to CoinGecko.
Data from Coinglass suggests bearish traders may have been wrong. Ethereum was the clear market leader, with more than $44 Million in liquidations happening within the last day.
That’s roughly 77% of the short positions.
The successful completion of the Shanghai upgrade enabled Ethereum holders for the first time to withdraw their holdings since staking began in December 2020.
This was the largest upgrade to the network since September’s Merge event, when Ethereum moved from a proof-of-work to a proof-of-stake consensus algorithm.
As a proof-of-stake network, Ethereum relies on validators, who put up a $63,000 deposit at press time, in order to secure the network and earn rewards.
These validators are penalised for any node failure.
Prior to Shanghai, validators could not withdraw their staked Ethereum or collect any awards. It was widely assumed that the newly available funds would cause a bearish reaction in the market.
Data from Nansen appears to confirm that validators are indeed cashing out, with a net outflow of more than 84,000 ETH over the last 24 hours.
ETH withdrawals vs. deposits Source: Nansen.
It seems unlikely, however, that the unlocked funds will be sold off at current prices.
The views and opinions of the author are for informational purposes only and do not constitute financial, investment or other advice.
