Ethereum Price Prediction: Why Ethereum Price Could See Major Selling In The Future?
The crypto broader market correction has already caused the second-largest digital asset Ethereum to fall 7.5% trading below $1,200. All gains made last week for ETH have been eroded by the recent price crash.
The cryptocurrency is now at risk of further decline. ETH investors have been staking coins with Ethereum 2.0 since the Beacon chain upgrades in 2017. The newly upgraded Ethereum 2.0 blockchain now holds 12% of total supply.
The ETH exchange reserves, on the other hand have fallen to 15% of total supply and are continuing to fall further. ETH is facing a potential threat to its value as the Shanghai hardfork, which is scheduled for March 2023, draws closer.
Investors will be able to withdraw staked Ether through this hardfork with the network validators. CryptoQuant, an on-chain data provider, explains how a mass selling of Ether could occur.
What happens to Ethereum 2.0 with Withdrawals?
One of the most pressing questions ETH investors are asking is how much Ethereum 2.0 can be withdrawn. Ethereum 2.0 currently holds 12% of total supply, or 15 million ETH coin. Data provider CryptoQuant explains:
“From a short-term perspective there are better APY strategies than staking reward by depositing ETH2 which might not be promised to withdrawal.”
Let’s also take a look at how Ethereum 2.0 balances have changed. The total number of ETH2 depositors has increased by 57% compared to 2021. The total balance of deposits has remained unchanged. This means that the total deposit balance has risen by 133% in 2022.
Courtesy: CryptoQuantCommenting on the ETH exchange reserves, CryptoQuant explains: “It may be that the balance of $ETH2 increases as the $ETH exchange reserve decreases. 18M $ETH, 15% of total supply, are currently held on the exchange. The exchange reserve is a continuing downtrend.
As the supply dynamics shift following the Shanghai hardfork ETH price volatility is likely.
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