Bitwise Analyst: The Increase in Available Ethereum for Withdrawal May Increase Selling Pressure in the Market
The number of Ethereum coins that exited the queue on the Ethereum blockchain reached a new record level on Friday, reaching 855,158 Ether. According to Juan Leon, an investment strategy expert at Bitwise,
this ongoing increase in the amount of Ether available for release could be one of the reasons for the recent decline in the price of this asset.
Typically, unstaked Ethereum has a negative impact on the price of Ether, as it can lead to significant selling pressure in the market. This is because staked tokens like stETH are traded at predetermined prices, and any drop in price may reduce the value of the collateral, leading to risk reduction and increased liquidations. As a result, Ether is sold in the spot market, increasing downward pressure.
Additionally, the "stETH cycles" trades that rely on leverage through decentralized finance (DeFi) protocols are no longer as profitable as they once were. Traders are now looking to liquidate their positions and sell Ether to repay loans, creating simultaneous selling pressure in the market.
This situation calls for close monitoring by investors, as downward pressures may continue to affect the price of Ether in the upcoming period.