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Crypto hedge fund founder claims that forecasts for selling pressure on Ethereum are overly pessimistic.
Hal Press, the founder of North Rock Digital, stated that the selling pressure on Ethereum (ETH) following the Shapella upgrade is unlikely to be as significant as many have forecasted.
In a tweet dated April 12, Press noted that existing data indicates that “most selling forecasts were overly optimistic and the selling will not be as intense as expected.”
Press mentioned that merely 4,000 Ethereum validators have chosen to exit the validator pool voluntarily. Out of this total, 1,600 are individual stakers who are most likely to liquidate their holdings.
Press remarked:
“From this 1,600, I conservatively estimate that 50% will sell and 50% will reallocate elsewhere (liquid staking was not available when they began staking). This results in 800 validators likely to sell, equating to 25,000 ETH. Additionally, there are another 50-60k in withdrawals, bringing the total to approximately 85k ETH.”
Press emphasized that even if his estimates were three times lower, only 250,000 ETH would be available for sale post-unlocking. He described this figure as “relatively insignificant” in relation to the total supply.
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With the Shapella upgrade set to occur later today, various analysts had anticipated that the unlocking of tokens could heighten the selling pressure on ETH.
Analytical firms foresee reduced selling pressure
The blockchain analytics company Glassnode estimated that 170,000 ETH might be sold following the Shanghai upgrade. The on-chain data aggregator based its forecast on the number of depositors intending to exit.
The firm asserted that the effect of any sales on the ETH price would be minimal — even in a scenario where the maximum amount of staked ETH and rewards are withdrawn and sold.
“The sell-side volume remains within the range of the average weekly exchange inflow volume. Thus, we conclude that even in the most extreme scenario, the impact on the price of ETH will be manageable.”
In addition, Arcana predicts that in a worst-case scenario, only 6% of ETH’s average daily trading volume will be available for sale during the first three days after withdrawals are permitted.
CryptoQuant also anticipates that selling pressure will be limited. It highlighted that 60% of all staked ETH are currently at a loss, indicating that selling now would not be profitable.
The post Crypto hedge founder says sell pressure projections on Ethereum are too high appeared first on CryptoSlate.
