According to on chain intelligence platform Glassnode, only 170K ETH (or 1%) of the total 18.1M staked ETH on Beacon Chain will be unstaked in the first week after Shanghai upgrade. They predicted that only 100k ETH ($190M) of the total accumulated rewards will be withdrawn and sold; and around 70k ETH ($133M) will actually become liquid.
Glassnode reinforces its point by explaining that there are only 253 depositors waiting to withdraw their stake and that Ethereum also has mechanisms to prevent huge sums of Ether being dumped into the market.
These 253 depositors currently own a total of 1,229 validators, of which 214 slashed validators that will be forced out as soon as withdrawals are enabled. Glassnode believes that the upgrade will not have a significant impact on Ether ($ETH) price.
“Even in the extreme case where the maximum amount of rewards and stake are withdrawn and sold, the sell-side volume still falls within the range of the average weekly exchange inflow volume. Therefore, we conclude that even the most extreme case will have an acceptable impact on the price of ETH.”
Also according to Glassnode, only 22% of the above 253 depositors are currently profitable. Glassnode expects that a large amount of ETH will be withdrawn from the Crypto Kraken exchange after being fined by the SEC regarding their staking service. The same is expected for Celsius lending platform as it will reportedly sell its staked ETH as part of its bankruptcy process, although it is unlikely both institutions will immediately withdraw after the upgrade.
The initial average price of staked ETH was $2,136, down 12.7% from its current price of $1,865, equivalent to a net unrealized loss of $4.7 billion. “After the peak unrealized loss of $16B in July 2022, the net unrealized loss now amounts to $4.7B. It is mainly carried by the Whale sized depositors, who hold a 76% share of the unrealized losses”, Glassnode noted.