Ethereum staking activity continues to experience sharp growth in the face of renewed bullish momentum in ETH’s prices, which is now holding firmly above the $2,300 mark. After recent staking actions from both retail and institutional investors, the amount of staked ETH has surged to unprecedented levels.
Staking On Ethereum Expands Rapidly
Interest in Ethereum among institutional and retail investors is shifting to another level. A fresh milestone is reshaping the supply dynamics of Ethereum, as staking activity witnesses a sharp growth, breaking past previous peak levels.
Leon Waidmann, a market expert and head of research at Lisk, announced on the social media platform X that the ETH staking ratio just exceeded 32%, marking a new all-time high. A 32% staking ratio reading implies that 1 out of 3 ETH is now locked away in staking contracts across the network.
The increase in locked Ethereum is a reflection of increased confidence among players as they commit more of their holdings to support the network and earn yield. Such a milestone is likely to strengthen ETH’s security and reduce the amount available on the open market for trading.
According to the data shared by Waidmann, this staking level took the leading network over 5 years to reach. As of January 2021, the staking ratio was sitting at 0%. With major achievements, staking is now unfolding as a crucial part of ETH, influencing the network’s structure and its entire market outlook.
Waidmann highlighted that staking operations recorded a 5% increase in the last 12 months. At the same time, Digital asset treasuries (DATs) continue to add more ETH to their crypto holdings, snatching up between 6.6 million and 7.4 million ETH, representing between 5.5% to 6.1% of the entire Ethereum supply in the market.
When combined, this rounds up to approximately 38% of ETH’s total supply, effectively leaving the market. “ The bottleneck for ETH isn’t demand, it’s available float,” Waidmann stated. Furthermore, the expert added that stakers do not unwind on drawdowns, and neither do corporate balance sheets sell their holdings on vibes. ETH’s supply locked in staking is a structural move, which is bullish for its near-term future.
ETH Whales Are Showing Cautious Behavior
Even though the price of Ethereum has undergone a brief upward move as the broader crypto market slowly recovers, investors’ sentiment appears to be shifting into a bearish state. This growing bearish sentiment among investors is observed in their recent positioning.
In a report, Joao Wedson, the founder of on-chain data analytics platform Alphractal, shared that ETH investors, especially large holders or whales, are leaning toward the short side. These investors are betting against the current upward momentum, as they steadily open short positions.
This trend is particularly evident among three leading trading platforms, such as Binance, OKX, and Gate. An interesting part of this trend is that these large holders are more interested in short positions on ETH than retail traders.
Featured image from Unsplash, chart from Tradingview.com
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