Ether’s (ETH) price action is expected to be “cautious” until the Ethereum blockchain’s Shanghai upgrade, due later this month, as the market is concerned about a supply overhang, Bernstein said in a research report Wednesday.

The Shanghai Fork will allow ether that has been staked, and is currently locked, to be withdrawn for the first time.

Bernstein’s analysis shows the supply increases are likely to be spread over a few weeks, even months, resulting in little selling pressure on a daily basis. The broker sees limited actual supply impact, but notes that weak sentiment due to unstaking can put pressure on the ether price prior to the event.

On the positive side, the market expects the removal of lock-in to lead to more people staking their ETH, which will give investors confidence with unstaking.

(By Will Canny)

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