According to statistics from Glassnode, there has been a sharp decline in the number of active validators on the proof-of-stake (POS) network since Shapella’s Ethereum (ETH) update launched on April 12.
As of April 12, according to statistics compiled from on-chain data sources, there were 562,941 active validators on the network. It dropped to 561,655 within 24 hours of the Shanghai update online and has remained there ever since.
The overall number of validators voluntarily leaving the Ethereum validator pool since Shapella has increased significantly by over 400%, as measured by a 30-day moving average.
The surge in withdrawals of ETH tokens stored previously by certain validators on the network is the cause of the ongoing reduction in the number of active validators on the Ethereum POS network.
Validators who previously protected networks with over 18 million ETH were allowed to start withdrawals after the Shapella update, which some of them did. 10,675 validators were planned for full exit in the previous hour, according to the Nansen dashboard, at the time of publication.
Due to the increasing withdrawals and sales by people who first staked their ETH coins for profit, many predict that the value of ETH will plummet once Shapella goes online. The alt value, however, increases briefly after the upgrade.
Between April 12 and April 16, the price of ETH rose by 14%, according to statistics from CoinMarketCap. The most popular cryptocurrency was trading over $2000 on April 16, when the price drop started. ETH was trading at $1,897.75 at the time of publication but has since lost 11%.
Despite the price drop, ETH whales, who now own between 100,000 and 10,000,000 ETH tokens, have increased their supply. Santiment records show that this large whale has grown by 2.5% since Shapella.
On the other hand, whales holding between 1,000 and 100,000 ETH coins have reduced their ETH holdings due to a risk aversion strategy. Santiment data shows that since Shapella, the number has decreased by 1%.
Also, although market sentiment briefly turned positive on April 14th as a result of the Shapella upgrade, it quickly returned to negative territory after the price drop, where it has remained ever since. It is -1.172 at publication. Any big increase in the price of ETH may be hard to come by given the widespread market negativity.