Crypto exchanges receive huge inflow after Shanghai upgrade

Traders deposited 1,101,079 ether to exchanges from April 13 to April 16, while only withdrawing 921,579 tokens, according to CryptoQuant data

Crypto exchanges received a net inflow of 179,500 ether (ETH), worth around $375mln in the four days after Ethereum’s Shanghai upgrade dubbed “Shapella” went live, as per crypto data firm CryptoQuant.

According to CryptoQuant data, traders deposited 1,101,079 ether to exchanges from April 13 to April 16, while only withdrawing 921,579 tokens. This was the biggest four-day net inflow in a month.

Investors transferring tokens to exchanges generally suggest they are preparing to sell, which may result in a price drop.

On April 12, Ethereum successfully completed a long-anticipated tech upgrade. The upgrade has allowed for withdrawals for the first time from Ethereum’s proof-of-stake blockchain, which has around 18mln ether, worth $36bln, locked in staking contracts.

Prior to the upgrade, some crypto watchers were concerned that the event would flood the market with millions of unlocked ether and crash the price of the second biggest crypto currency, however others forecasted small effect or that the price would increase. News of a seamless implementation upped ether’s price to more than $2,100 the next day, its highest since May last year. Ether surpassed bitcoin (BTC) during that 24-hour period. Ether was lately trading at around $2,070, over 2 per cent lower during the last 24 hours.

Data indicates that some traders have sold ether during the price rally after the Shanghai upgrade.

Since the upgrade, the ETH-USD trading pair on Coinbase recorded $28mln more sell orders than buy orders, as per a report from crypto market research platform Kaiko on Monday.

Coinbase was one of the first exchanges that allowed users right away unlock and withdraw their staked ether via its platform. Binance, the world’s biggest crypto exchange in terms of volume, will follow suit on April 19, which ‘could result in more sell pressure for ether,’ Kaiko stated.