39 Million ETH Locked in Ethereum…Why Isn't the Price Rising?

▲ Ethereum (ETH)/ChatGPT Generated Image ©

Despite Ethereum's staking volume reaching an all-time high, with the price stuck in the $2,200 range, tension is growing in the market between 'supply reduction' and 're-expansion of selling pressure'.

According to Bitcoinist, a cryptocurrency specialized media outlet, on May 16 (local time), Ethereum (ETH) staking volume recently increased to approximately 39 million ETH, reaching an all-time high. This accounts for about one-third of the total circulating supply. The outlet analyzed that as such a large volume is locked in staking contracts, the liquid supply immediately available for trading in the market has significantly decreased. In other words, the supply reduction itself is a structural factor supporting the long-term floor of the ETH price.

However, recent trends have also shown signs of change. According to CryptoQuant data, the staking volume, which had been sharply increasing since the beginning of this year, has recently started to stagnate or slightly decrease. The outlet interpreted this as suggesting that some investors may have secured liquidity by unstaking or begun rebalancing their portfolios. In particular, as unstaking requires a certain waiting period rather than an immediate reaction, it can be seen as a move reflecting more cautious judgment.

The price movement remains frustrating. ETH is currently trading around $2,250 and has repeatedly failed to break through the resistance zone of $2,300-$2,400. On the daily chart, ETH is holding above the 100-day moving average but remains below the 200-day moving average. The outlet diagnosed that this 200-day line is currently acting as a key technical resistance level in the market.

After ETH dropped below $1,800 during the sharp decline in February, buying interest flowed in, maintaining a gradual recovery structure. However, in the recent sideways trading range, trading volume has noticeably decreased, and there's a trend of weakening upward momentum near resistance. The outlet assessed that the current market lacks conviction to establish a strong direction, and new demand inflow is needed for further price increases.

Bitcoinist defined the current Ethereum market as a 'compression zone.' While the all-time high staking volume signifies long-term confidence, the slowdown in staking growth simultaneously serves as a warning sign of potential increased volatility. The outlet diagnosed that when changes in supply structure enter historically extreme ranges, price volatility could become greater depending on which direction the next catalyst acts.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*