Ethereum Exit Queue Hits All-Time High of Over 855,000 ETH
On August 17, the queue of validators wishing to exit the Ethereum blockchain reached an all-time peak, with 855,158 ETH in the exit queue.
Juan Leon, senior investment strategist at Bitwise, suggested that this increase in the number of ETH to be unstaked may be the cause of the recent price correction of the asset. The queue of unstaked Ethereum usually has a negative impact on the price of ETH and may create even greater selling pressure in the future.
The Cascading Effect on ETH Price
The situation may worsen. Staking tokens like stETH can be traded at a discount, which, in turn, decreases the value of the collateral. This can trigger a series of events:
* Risk reduction
* Hedge (protection against losses)
* Liquidation of positions
All of this ultimately leads to the selling of ETH in the spot market. Moreover, the trading of "stETH cycle" (leveraged strategies made through DeFi protocols) becomes less profitable, prompting traders to close their positions, selling ETH to pay off loans and creating additional selling pressure.
Information provided by [BlockBeats].
