CryptoQuant analysts are noting a second wave of selling as the altcoin market bottoms out. Pointing to an upcoming hard fork, analysts are investigating why it could kick off sales.
CryptoQuant analysts say sellers are rallying around this altcoin
The on-chain analytics firm pointed out the possibility of a “bulk Ethereum sale” in new tweets. Analysts share two scenarios where Ethereum will fall into the hands of sellers again. The first is the drastic increase in entries into the Ethereum 2.0 contract, where funds will remain locked until the Shanghai hard fork goes into effect. Currently, the amount of ETH locked in the contract is roughly 12% of the total supply. The data also shows that the number of ETH staking investors is gradually decreasing.
The Shanghai hard fork will take place six months after the Merge update, which went into effect in mid-September. This means that we will see high volatility in March 2023. CryptoQuant analysts, however, say that its price will follow this trend as the supply of Ethereum on exchanges declines.
CryptoQuant experts believe that the upcoming Shanghai hard fork will be the main driver of the ETH sale, as it will, among other things, enable the withdrawal of Ethereum that has been invested since the contract launch in November 2020.
Cardano founder criticizes Ethereum’s PoS model
Charles Hoskinson had previously criticized the staking model implemented by ETH, which required the coins staked to be locked until the Shanghai update. He also added that those who stake in Ethereum are rich enough if they can afford to send crypto to the deposit contract in ETH 2.0.
Hoskinson says that unlike Ethereum stakers, Cardano stakers don’t have to be rich. In addition, Cardano also states that they can withdraw their ADA at any time. In fact, they don’t have to carry their ADA from their wallets for staking. Therefore, according to the CryptoQuant tweet, stakers will likely withdraw their Ethereum in March. Later, most of them will start selling these ETHs.
What you need to know about the Ethereum Shanghai hard fork
According to a discussion at the 151st Ethereum Core Developers meeting on December 8, the next Ethereum hard fork, known by the codename ‘Shanghai’, could arrive as early as March 2023. Shanghai is the next step in ETH’s roadmap as it moves from a PoW system to a PoS system. Earlier this year, the ‘Merge’ update effectively formalized the transition of ETH from PoW to PoS operation.
Thus, Merge replaced “Ethereum mining” with “Ethereum staking”. Without going into the technical details, let’s note that staking allows anyone who owns ETH to ‘lock’ them in the network for becoming a ‘validator’ and receive rewards in the form of ETH for doing so. to more details cryptocoin.comWe have included it in this article.
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