Ethereum’s successful implementation of withdrawals, also known as the Shanghai upgrade, on April 12 has caused a surge in Ethereum’s price, reaching its highest level since May 2022. According to CryptoQuant, crypto exchanges saw a net inflow of 179,500 ether (ETH), equivalent to $375 million, in the four days following the upgrade.
Investors depositing tokens to exchanges typically indicate their intent to sell, which could result in a decline in prices. The data firm also reported that traders deposited 1,101,079 ETH to exchanges between April 13 and 16, while only withdrawing 921,579 tokens. This four-day net inflow is the largest in a month.
Ethereum‘s proof-of-stake blockchain, which has around 18 million ETH, worth $36 billion locked in staking contracts, enabled withdrawals for the first time after the Shanghai upgrade. Prior to the upgrade, some market watchers were concerned that the event would flood the market with millions of unlocked ETH and cause the cryptocurrency’s price to plummet. However, the successful implementation pushed ETH’s price above $2,100, outperforming bitcoin (BTC) in a 24-hour period.
Although some traders sold their ETH during the post-Shanghai price rally, some exchanges such as Coinbase and Binance allowed users to unlock and withdraw their staked ETH through their platforms. Kaiko, a crypto market research platform, reported that since the upgrade, the ETH-USD trading pair on Coinbase had recorded $28 million more sell orders than buy orders, indicating a potential sell pressure for ETH.
Join the Most Important Conversation in Crypto and Web3 in Austin, Texas April 26-28. Binance will follow Coinbase’s lead and enable withdrawals on April 19, which may increase the sell pressure on ETH. Despite its recent price fluctuations, ETH is currently trading at around $2,079.
