Ether-Bitcoin Ratio Likely to See Deeper Decline After Shapella Upgrade: QCP Capital

Ether has underperformed bitcoin in the lead up to the Shapella upgrade, resulting in a 13.7% year-to-date decline in the ETH/BTC ratio.

AccessTimeIconApr 12, 2023 at 12:28 p.m. UTC
Updated Apr 12, 2023 at 3:48 p.m. UTC

Singapore-based crypto options trading giant QCP Capital expects a deeper decline in the ether-bitcoin (ETH/BTC) ratio following the impending Shapella hard fork, dubbed Shanghai upgrade.

"ETH/BTC has broken through the key support level of 0.658 and can potentially head back to 0.0553, as continued and sustained spot selling pressure in thin markets for days after Shapella leads to further bearish price action on ETH," QCP Capital's market insights team told CoinDesk.

The ETH/BTC ratio has declined 13.7% this year amid lingering fears that investors will rush to liquidate coins after Shapella opens withdrawals of staked ether.

According to some analysts, the selling pressure will be distributed over several days, allowing buyers to absorb selling pressure and keep prices steady. QCP, suggests otherwise.

"We fail to see what the bullish case can be for this event as those at the front of the queue [in withdrawals] are likely to sell spot, while those further back will be hedging via perps/futures if they have not already done so," QCP noted.

Users cannot withdraw the entire stack of over 18 million staked ether immediately after the upgrade. However, just over 1 million ETH earned in staking rewards can be pulled out immediately. Troubled entities like crypto lender Celsius might sell its staked ether balance of 158,176 ETH to recover at least a portion of creditors' funds, according to K33 Research.

Edited by Parikshit Mishra.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Omkar Godbole

Omkar Godbole is a Co-Managing Editor on CoinDesk's Markets team.