How Did Ether Price Predictions Fare After Shapella Upgrade?

Validator withdrawal limits, the ability for stakers to hedge out exposure and general interest has proved to be mostly accurate in the short-term price predictions for ether

article-image

Source: Shutterstock / Overearth, modified by Blockworks

share

Ethereum’s Shapella upgrade is now just over a week old, with early network figures offering some insight into the current performance and health of the ecosystem.

Analysts who predicted Shapella would not greatly impact pricing, have been proven mostly right, though some market participants turned out to be incredibly wrong.

The network has either partially or completely distributed more than 1.3 million ETH ($2.52 billion) — a significant jump from last week’s $617 million, data shows.

Out of these withdrawals, roughly two-thirds comprise rewards that were accumulated from past validator duties, research firm K33 said in a recent analysis. Those rewards were automatically distributed. For validators fully withdrawing, there is an exit queue that limits the rate of withdrawal. That ensures the proof-of-stake network remains secure even in times of high demand to leave.

Matt Fiebach, an analyst for Blockworks Research, said just before Shapella went live, he expected there to be minimal impact on price from the $34 billion in total staked ETH becoming somewhat more liquid.

The analyst pointed to a plethora of related derivatives available that could allow ETH stakers to hedge out their exposure prior to the unlock.

Katie Talati, director of research at crypto-focused asset manager Arca, also told Blockworks at the time due to the validator withdrawal queue limits, she anticipated a minimal impact on sell-side pressure.

That coincided with statements from Rich Falk-Wallace, CEO of research platform Arcana. Assuming the maximum outflow of validators occurs, Falk-Wallace estimates that it would take more than two years for the number of validators to decrease from the current 536,000 to 100,000.

That’s not a given, however — more validators can join the network as well. Over the past 7 days, there has been a net increase in the number of validators by about 18,000. The staking yield increases when more validators leave, which should have the effect of establishing an equilibrium.

The initial impact on price was positive, with ether (ETH) briefly pushed to new heights above $2,100 — a level not seen in almost a year — on April 16. 

While a market correction threatens to undo most of this month’s run-up, predictions over short-term volatility have proven to be mostly correct.

Some traders admitted defeat on their bearish predictions for the impact of the upgrade, such as popular Twitter pundit, Kamikaz, who has now flipped “bullish.” Just days before, the pseudonymous self-proclaimed analyst had predicted a “death spiral” for the asset.

Loading Tweet..

Kamikaz had, for some time, been locked in an ongoing feud with North Rock Digital’s Hal Press over ETH’s directional bias in both the short and long term. 

Ahead of the upgrade, Press predicted in late March that ETH’s price relative to bitcoin (BTC) would reach roughly 0.08 ETH/BTC. That came incredibly close, reaching a maximum of 0.07 ETH/BTC, five days after the upgrade went live. 

ETH/BTC is a trading pair on crypto exchanges that represents the ratio of ether per bitcoin. It is used by traders and investors to speculate on the relative strength of both assets.

Press’ post-Shapella target prediction may yet be vindicated, though for now ether remains squarely in a long-term range established in May 2021, indicative of the high correlation between the top two crypto assets.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

The company did about 2.5 times the amount of crypto-backed collateral financing in November compared to the rest of 2024, exec says

article-image

Programmable yield, seamless swaps and decentralized control are the hallmarks of a new stablecoin model

article-image

Crypto is “really exciting,” former SEC Commissioner Paul Atkins said in a podcast interview last year

article-image

Bitcoin is now the “seventh most valuable asset in the world by market cap, just behind the likes of Google and Amazon,” GSR’s Brian Rudick said

article-image

Many analysts expected bitcoin to top $100K before year-end, though it’s been on a post-election tear

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?