Ethereum fell as low as $2,100 this week before rebounding, adding an impressive 25% from the August 2024 lows. While there is confidence that prices will continue to rise, breaking through $2,800 and even the psychological round number of $3,000, other market events could slow the bulls.
Ethereum Network Unlocks Over 143,000 ETH
According to Token Unlocks dataHundreds of thousands of ETH are pending and expected to be withdrawn today. On-chain data reveals that validators are preparing to withdraw 143,000 ETH worth nearly $350 million. Another 212,000 ETH will be available for trading in the coming days, which could increase price pressure.
As of August 9, Ethereum had a circulating supply of over 120 million, according to CoinMarketCap dataSince Dencun, the network is inflationary, meaning more coins are not burned like before.
Validators must stake at least 32 ETH and ensure that their nodes maintain high uptime of nearly 100%. At the same time, according to the network’s consensus rules, validators must not engage in illegal activities such as pooling to approve invalid transactions.
Failure can lead to a reduction, where a portion of their stake is taken as a penalty. However, since they must commit to maintaining the decentralized network, they receive a portion of the annual yield of the stake. At the same time, they have the opportunity to approve a block of transactions and receive rewards accordingly.
The ETH that is expected to hit the market will be the yield from their staking activities. This release is different from the block rewards that are distributed approximately every 13 seconds.
Even though the market is expecting an increase in supply, Token Unlocks analysts note that these withdrawals will not necessarily mean that they will be liquidated. However, if they are sold, the recovery will likely be slow.
Will bulls take over and force prices above $3,000?
There is cause for concern. Historically, Token Unlocks analysts have observed that prices tend to drop whenever the Ethereum network unlocks such a large amount of tokens in a short period of time. Over the past three months, unlocks between 150,000 and 220,000 ETH have coincided with price drops.
Looking at the daily chart, Ethereum is recovering. Although the downtrend continues after the unexpected drop to $2,100 earlier this week, the rebound has been decent.
The immediate liquidation line is approximately $2,600. If buyers insist, winnings will be confirmed of On August 8, ETH prices could rise, but then fall on the expected floodand retest $3,000.
Main image from Canva, chart from TradingView
