Ethereum’s price experienced a slight increase on May 17, reaching $3,040, which is 6% higher than the 14-day low of $2,862 recorded on May 14. However, concerns arise as the surge in ETH 2.0 staking withdrawals may hinder the rebound of the cryptocurrency.
In comparison to other cryptocurrencies, such as Bitcoin, Solana, and Pepe, Ethereum failed to attract a significant amount of capital inflows during the recent bullish momentum in the crypto market. The increase in bullish activity can be attributed to the release of the US Bureau of Labor Statistics’ latest CPI data on May 14 and the resurgence of the GameStop rally.
Despite Ethereum’s underperformance, its price currently hovers around $3,042, showing a 6% increase since May 13. However, when compared to other major cryptocurrencies like Bitcoin and Solana, Ethereum’s price action has been relatively lackluster.
The TradingView chart above illustrates Ethereum’s lagging performance. Furthermore, on-chain staking data from the ETH 2.0 beacon chain reveals a concerning trend that could lead to increased volatility in Ethereum’s price action in the coming days.
The Validator Queue chart shows the number of investors looking to join the ETH 2.0 staking pool versus those looking to withdraw their funds. At the beginning of the week, only 93 stakers opted to withdraw their staked ETH. However, as of May 17, this number has skyrocketed to 3,868 addresses, marking a 4,000% increase in just three days. Simultaneously, the number of ETH 2.0 deposit entries has decreased by 97% over the past week, signaling a decline in long-term investor confidence.
The combination of increased withdrawals and decreased deposits creates downward pressure on Ethereum’s price. The rapid rise in withdrawals adds to the circulating supply of ETH, potentially flooding the market, while the drop in new deposits indicates a lack of long-term confidence among investors. These factors could contribute to further bearish trends, leading to increased market volatility and sustained downward pressure on Ethereum’s prices.
Given the recent spike in ETH 2.0 staking withdrawals, it is likely that Ethereum’s price will fall below $2,900 in the near future. The Bollinger band technical indicator also supports this pessimistic forecast for ETH’s price. The upper-limit Bollinger Band indicates that ETH’s price is still far from reclaiming the critical resistance level at $3,200, which would favor the bulls. However, if the price drops below the short-term support at the 20-day SMA price level of $3,023, it could trigger a rapid bearish reversal towards $2,825.
It is important to note that this article is for informational purposes only and should not be considered financial advice. The views expressed in this article are solely the author’s and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions, and The Crypto Basic is not liable for any financial losses incurred.