In a recently published tweet, on-chain data aggregator CryptoQuant hinted that there are odds of an «ETH mass-selling event» coming soon.
Here’s why they believe traders may begin dumping their Ethereum.
Reasons for a possible mass sell-off of Ethereum
CryptoQuant analysts believe that there are two main reasons for a potential Ethereum sell-off. The first is a drastic surge of inflows into the Ethereum 2.0 deposit contract, where funds are locked until the Shanghai hard fork. The amount of locked ETH in the contract now totals roughly 12% of the total Ethereum supply. Besides, the chart shows that the amount of depositors has been dropping low.
The latter, according to data published earlier by Ethereum, is due half a year after the Merge event, which took place in the middle of September — that is, in March 2023.
The second reason is that Ethereum’s supply on exchanges keeps plunging. CryptoQuant experts believe that the upcoming Shanghai hard fork is to become the major driver for the ETH sell-off as, among other things, it will make it possible to withdraw Ethereum staked since the launch of the contract in November 2020.
🚨 $ETH Mass-Selling Event Is Coming?
1/ The #ETH2 Deposit has amassed, holding 12% of the total supply.
As the $ETH exchange reserve drops down to 15% of the total supply and continues to decrease,
What will happen on $ETH after the Shanghai Hard Fork?🧵https://t.co/RrFQrLPeda pic.twitter.com/CrWhqSbxPn
— CryptoQuant.com (@cryptoquant_com) December 16, 2022
Cardano founder slams Ethereum’s PoS model, here’s why
As reported by U.Today earlier, founder of Cardano (and co-founder of Ethereum), mathematician and billionaire Charles Hoskinson, criticized the staking model implemented by ETH, which requires the staked coins to be locked until Shanghai.
He commented on the Discord public message left by Micah Zoltu, founder of Serv.eth Support, who stated that there are now more important things to work on rather than allowing withdrawals. He added that those who stake on Ethereum are wealthy enough if they can afford sending crypto to the deposit contract on ETH 2.0.
Hoskinson stated that unlike stakers of Ethereum, those who stake with Cardano do not have to be rich, and they can withdraw their ADA any time. Actually, they do not have to move their ADA from wallets for staking.
Therefore, per the CryptoQuant tweet, stakers are likely to withdraw their Ethereum in March (unless the launch date gets delayed) and will start selling it.