- ETH sees a surge in exchange outflows as discounted price attracts aggressive accumulation.
- At least 19,500 validators are in the withdrawal queue post the Shapella upgrade
More than one week has passed since Ethereum’s highly anticipated Shapella upgrade finally happened. While there was a lot of anticipation, many ETH holders were concerned about the potential sell pressure from validators unlocking their ETH.
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The concerns were genuine given the large sum of ETH that had been locked. So, how have things faired a week after the event? A recent analysis by CoinShares may provide useful insights and a glance at how staked withdrawals have faired.
According to the analysis, validators withdrawing their ETH have a 12-day waiting period for the Shapella upgrade to withdraw all of their staked coins. It also revealed that there were 19,500 validators in the withdrawal queue and 7,800 validators in the deposit queue.
(1/7) 8 days after Ethereum’s #ShanghaiUpgrade, what’s the current state of $ETH staking withdrawals?
In this Chart of the Week, we take a look at key figures and what data to monitor as an Ether investor 🧵 pic.twitter.com/o2bHIsjXTG— CoinShares (@CoinSharesCo) April 20, 2023
Of course, there were concerns regarding the withdrawals potentially increasing especially since over 95% of the validators have not withdrawn yet.
Does validator movement mean validator migration?
Data from CoinShares also revealed that most validators were withdrawing their staked ETH from Kraken to shift to a different staking platform.
The data suggested that roughly 80% of the ETH being withdrawn was from Kraken due to the SEC’s recent regulatory pressure that the exchange has been receiving from the SEC.
(4/7) The vast majority of withdrawals is @krakenfx (~80%) as the @SECGov forced them to shutter their staking service for US customers. pic.twitter.com/WaZPKWBKQJ
— CoinShares (@CoinSharesCo) April 20, 2023
The key determinant for analyzing sell pressure based on the validators withdrawing their staked ETH was whether they would stake their ETH on other platforms. There stood a great possibility that other platforms such as Lido could absorb most of the validators.
The state of ETH demand
Of course, an assessment of the level of demand for ETH could help determine the extent of sell pressure. ETH’s latest exchange flow data on Glassnode revealed a strong surge in exchange outflows in the last 2-3 days.
Source: Glassnode
Exchange outflows were almost double the amount of exchange inflows at press time. This observation might indicate that there was strong accumulation courtesy of the latest ETH price discount.
As far as whale activity was concerned, whales controlled roughly 32% of ETH’s current supply at the time of writing.
Source: Santiment
How many are 1,10,100 ETHs worth today
These signs confirmed that the market was regaining confidence, although not strong enough to push ETH back above $2,000 for now.
Perhaps part of the ongoing uncertainty has to do with the still unknown fate of the validators that are still on the incomplete unstaked withdrawals.
