After a months-long wait since The Merge and successful test on the Goerli test network on March 14, Ethereum developers announced a target date for the Shanghai hard fork. Now everyone calls it Shapella — like Shanghai (for the execution layer) + Capella (for the consensus layer), but it doesn't change the point.

Seamless deployment on Goerli included simulated $ETH withdrawals from the staking contract and set the stage for the much-awaited upgrade to go live on April 12. Shanghai marks the completion of Ethereum's full transition to Proof-of-Stake (PoS).

With this upgrade, 17 million staked ETH will be unlocked for the first time since November 2020 and could enter the market. When those coins were locked in the staking contract in December 2020, ETH was trading at ~$440. Therefore, some are concerned that unlocking them could bring downward pressure on the ETH price.

But in reality, the case may not be that straightforward (thread):

Meanwhile, Christine Kim, the Vice President of Research at Galaxy Digital, pointed out in the Unchained Podcast that the Shanghai upgrade could become a big stress test for the network. That's why Ethereum developers impose a limit of 57,600 withdrawals per day to keep the network secure.

Coinbase has already hastened to inform its clients that "it may take the protocol weeks to months to process unstaking requests."

In the context of the expected unlock of staked ETH, it is important to understand also that after The Merge activation, Ethereum supply became deflationary, dropping more than 65,000 ETH today (>$100 mln) since September 2022, according to ultrasound.money data.

So it looks like that might make sense: