Ethereum 2.0 Staking Crosses 30 Million ETH for the First Time

On September 19, the total value staked in Ethereum 2.0 contracts crossed 30 million ETH for the first time since. On-chain data reveals the Fed rate pause announcement may have triggered the bullish response among Ethereum investors. Here’s how Ethereum’s price could react in the mid to long-term.

Ethereum’s week-long price rally slowed Wednesday as ETH spot market traders sought to book early profits after the much-anticipated Fed Rate pause announcement. But behind the scenes, Ethereum long-term investors ramped up ETH 2.0, Staking by another $126 million.

Total Deposits in Ethereum 2.0 Staking Contracts Crossed 30 Million ETH

Ethereum staking deposits spiked ahead of the recent Fed Meeting, bringing the total value staked in ETH2.0 contracts to 30 million ETH. This is the first time Ethereum staking has reached this milestone since the landmark transition to Proof of Stake (PoS) consensus.

According to the on-chain data compiled by Glassnode, Ethereum long-term investors have deposited 856,709 ETH in September so far to reach the 30 million milestone.

As shown below, the ETH 2.0 Total Value Staked stood at 29.23 million ETH as of August 31. At the close of September 20, the balance had increased to 30.09 million ETH.

ETH Total Value Staked – Source: Glassnode

Glassnode’s Total Value Staked metric tracks the amount of Ethereum coins deposited to the ETH2.0 staking contract. An increase in staking deposits primarily improves the security of Proof of Stake consensus protocols. 

But more than that, it implies that network participants are growing confident in Ethereum’s long-term viability.

This 30 million ETH milestone means more than $48.6 billion worth of value is now locked up on the Ethereum Beacon Chain. Notably, it also means that more than 25% of the 120,227,795 ETH total circulation supply of 120.2 million is now locked up in smart contraction.

Locking up 25% of the market supply could potentially speed up the Ethereum price upswing during the next bull rally.

Read More: 11 Best Crypto Portfolio Trackers in 2023

The Fed Rate Pause Accelerated Staking Deposits

Ethereum’s week-long price rally slowed Wednesday as ETH spot market traders booked early profits after the much-anticipated Fed Rate pause announcement.

But behind the scenes, as the yield on risk-free US government bonds remains unchanged, Ethereum whale investors opted to ramp up ETH 2.0 staking by another 77,800ETH worth approximately $126 million. 

The chart below illustrates how the net change in ETH 2.0 staking deposits began to rise around September 17, just days before the US Fed confirmed the rate pause.

ETH 2.0 Staking Crosses 30M —How Will Ethereum Price React | Beacon Chain Deposits vs Withdrawals
Beacon Chain Deposits vs Withdrawals | Source: TheBlock

Notably, ETH 2.0 staking withdrawals were enabled on April 12 with the launch of the Shapella upgrade. Since then, the net-change values have provided clear insights into the staking dynamic by weighing daily deposits against withdrawals. 

Also, the 32 ETH ($52,000) entry requirement means that most staking participants are large institutional entities and high-networth crypto whales. Hence, this increase in staking means they consider the yield earned from ETH 2.0 staking highly competitive relative to alternative TradFi asset classes.

This could boost the retail investors’ confidence and trigger an Ethereum price upswing in the mid to long term.

Read More:  Top 9 Telegram Channels for Crypto Signals in 2023

ETH Price Prediction: The Bulls Could Push For $3,000 During the Next Bull Rally

The last time the Ethereum price hit $2,000 was on July 14, 2023. But notably, since then, 3.5 million ETH coins have been removed from circulation and staked in ETH 2.0 contracts.

Albeit temporary, this drop in market supply could propel Ethereum’s price toward $3,000 if it attracts a similar level of demand.

The In/Out of Money Around Price data, which depicts the purchase price distribution of current ETH holders, also validates this bullish stance.

It shows that if Ethereum scales the $2,100 obstacle, the bulls will face significantly less resistance on the road to $3,000. ​​

As shown below, the 9.06 million addresses bought 37.15 million ETH at the average price of $2,160 is the largest cluster of ETH holders. But if the ETH 2.0 staking continues to soar above 30 million coins, the Ethereum price rally will likely hit $3,000.

Ethereum (ETH) Price Prediction - IOMAP data. Sept 2023
Ethereum IOMAP data. Sept 2023. Source: IntoTheBlock

Conversely, the bears could seize control if the ETH price drops below $1,500. However, as shown below, 3.72 million addresses had bought 7.6 million Ethereum at the minimum price of $1,526. If they opt to cover their positions rather than sell, the ETH price could rebound. 

But if the ETH loses that vital support level, the price could drop toward $1,400.

Check Out the 9 Best AI Crypto Trading Bots to Maximize Your Profits 

The post Ethereum 2.0 Staking Crosses 30 Million ETH for the First Time appeared first on BeInCrypto.

Source link