Ethereum Price Under Threat Amid Staker Sell-Off Concerns, Impact On ETH

Ethereum price (ETH) has been unable to break above the $2,200 resistance level even after the Shanghai/Capella (Shapella) upgrade. According to on-chain metrics, there are concerning signals as stakers remain positioned for sell-action. Holders are now worried about whether ETH could lose its current support level around the $2,000 area.

Following an initial positive reaction to the successful Shapella upgrade, the largest altcoin now faces an uncertain short-term future. Based on data from IntoTheBlock, there is a surge in the volume of large Ethereum transfers in the wake of the Shanghai Capella upgrade.

The volume of large #ETH transactions has been increasing steadily this week. From 708k $ETH on April 9th to over 2.2M $ETH yesterday https://t.co/VN2Nxw1H6C pic.twitter.com/TulGVyn84J

— IntoTheBlock (@intotheblock) April 14, 2023

The same has been corroborated by Santiment data, showing that ETH volume increased by over 80% from 6.08 billion to 10.96 billion between April 9 and April 17. Similarly, whale transaction count above $1 million also noted a sizeable increase.

As ETH 2.0 stakers started looking for alternative avenues for deploying their newly-withdrawn holdings, fear lingers on whether this could hurt Ethereum price.

Ethereum stakers load up their wagons

Data according to Glassnode shows that the supply of coins deposited on exchanges has soared by 100,000 ETH since April 10, indicating that investors seeking to sell their ETH holdings can now do so faster and easier. As shown in the chart below, Ethereum Balance on Exchanges surged 0.6% from 18.09 million coins on April 13 to 18.20 million coins on April 17.

Notably, when an exchange holds more coins, these coins are readily available for trading, and with ETH 2.0 stakers pulling out their coins, they could soon accumulate on selling pressure. Such an outcome could provoke a potential price pullback in the next few days.

Moreover, an evaluation of the aggregate order books from certain exchanges reveals that the number of ETH available for sale at the moment is far more than the demand around the prevailing market rates. Data analyzed by IntoTheBlock shows that there are open sell-orders for 6 million ETH around the +/-30% price boundaries. However, as it stands, buyers have only placed orders for around 5.2 million ETH.

During instances when exchange order books record more sell order volume compared to buy orders, it is typically interpreted as more supply than demand for the concerned asset. Such a position could compel a price drop as sellers could have to reduce their prices to entice investors.

Accordingly, the influx of  Ethereum coins on exchanges, presumably selling momentum accumulated due to newly unstaked coins, and unbalanced exchange order books could all come together, triggering a correction in Ethereum price.

Ethereum price could correct towards $2,000

At the time of writing, Ethereum price is $2,078 after losing around 2.22% in the last 24 hours.

Ethereum price could retrace toward the $2,000 level, with Global In/Out of Money Around Price (GIOMAP)showing that there was robust support between the $1,748 and $2,053 level as this was the zone where 7.01 million addresses bought 13.13 million ETH at an average price of $1,864.

On the flip side, if bulls invalidate the bearish thesis and Ethereum price breaks above the $2,100 resistance level, 7.46 million addresses holding approximately 7.58 million ETH could pose a formidable roadblock between the $2,147 and $2,892 zone.

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