The year 2022 has been a nightmare for the cryptocurrency market. The fluctuation of the market after the negativities experienced one after another caused a crisis of confidence in the market. The fact that the central banks, especially the Fed, carried out hawkish policies and increased interest rates in the inflationary period, kept investors away from assets defined as risky. We have seen the effects of this in the crypto money market. Ethereum hit an all-time high in November last year with a valuation of $4,891. However, it has lost 75% of its value in the intervening year.
Blockchain analytics provider CryptoQuant has announced that the selloff in Ethereum may continue. CryptoQuant analysts noted that entries into the Ethereum 2.0 contract, which will remain locked until the Shanghai hard fork goes into effect, have increased drastically, with the amount of ETH currently locked in the contract accounting for 12% of the total supply. The Shanghai hard fork will take place six months after the Ethereum Merge update in September. This coincides with March 2023.
On the other hand, it is also important to note that the supply of Ether in central exchanges continues to decline. Analysts on the on-chain analytics platform are of the opinion that following the upcoming Shanghai update, this move by investors who will want to sell their staked ETH will trigger a massive Ether sale. According to data from Dune Analytics, there is currently $18.9 billion worth of Ether on the network.