The Ethereum network's much awaited transition from PoW (Proof-of-Work) to PoS (Proof-of-Stake) consensus underpinned by the shapella upgrade, which is a result of combination of Shanghai and Capella upgrade, is about to go live. This upgrade includes a code that allows withdrawals of staked ETH from the Beacon Chain. This news has drawn speculations regarding the possibilty of ETH prices to be affected by the selling pressure once the upgrade is in effect.

According to a report developed by on-chain intelligence firm Glassnode, the selling pressure is likely to be minimal. Out of around 18 million staked ETH (valued approximately $33.9 billion) that will be unlocked after the upgrade, only around 100,000 ($190 million) staking rewards and 70,000 ETH ($133 million) in staked ether will be sold. This volume of sell-side would lie well within the range of weekly exchange inflow volume.

Explaining the prediction, Glassnode pointed out that 253 depositors are currently waiting to exit their ETH stake and blockchain has adopted several safeguards against possibly of market flooding because of sudden ETH supply. Furthermore, most of these 253 depositors are solo-stalkers or stakers from an early period in the life of Beacon chain, which implies the withdrawals are related to technical setup rather than to exit the position.

It is noteworthy that the PoS transition began with a merge upgrade in mid-September 2020. This upgrade facilitates the convergene process of mainnet execution layer and Beacon Chain consensus layer and replaces miners with validators as the core service provider of the network. It is anticipated that at the successful completion of the transition, Ethereum network would be much more energy efficient and reduces the energy footprint for the network by over 99.9%.

At the moment of writing, Ethereum is trading at $1,875, down by around 2% in the past 24 hours. According to Glassnode, even in the extreme case when the maximum amount of stake and rewards are withdrawn, the selling pressure would be absorbed by market participants and wouldn't possess a dramatic impact on the ETH prices.



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