The 900,000 ETH awaiting redemption on Ethereum may exacerbate selling pressure

According to news from HashKey, based on data from validatorqueue.com, the amount of ETH waiting for validators to exit on the Ethereum blockchain has reached 897,599, setting a new historical high. Bitwise Senior Investment Strategist Juan Leon stated that the extension of the redemption queue may be the reason for the recent adjustment of this asset. Currently, the second-largest cryptocurrency by market capitalization, ETH, has seen its price drop by several hundred dollars in the past few days after hitting a historical high. Juan Leon explained that the ETH in redemption could have a negative impact on ETH prices. 'Tokens like stETH may trade at a discount. This discount reduces their value as collateral, leading to risk reduction, hedging, or even liquidations, ultimately resulting in ETH spot sell-offs.' Juan Leon added that as the redemption queue grows, some traders may choose to close their positions, especially in the context of soaring ETH borrowing costs. When this happens, 'leveraged stETH loop trades conducted through liquidity pools on DeFi protocols will no longer be profitable.' Leon stated, 'Traders create synchronized selling pressure by closing positions and selling ETH to repay loans.'