Ethereum, after three weeks of strong price performances, finally found support above the $3k level. However, as the market consolidated, Ethereum’s price saw a few dips over a few days. Its price action reversed course soon though thanks to Bitcoin gaining on the chart. In fact, the same pushed ETH beyond the $3200-mark.
After the EIP-1559 implementation, there have been considerable changes in the network. That has certainly had an effect on the altcoin’s price too. For one, this Ethereum rally has been supported by capital rotations and high value staked in ETH 2.0, as highlighted by Glassnode.
Outflows and staking stole the show
Ethereum’s price trajectory was supported by continued outflows of ETH supply on exchanges. Exchange ETH balances, at the time of writing, had declined to touch an all-time low of 13% of the circulating supply this week. This was equivalent to 15.3 million ETH.
Simultaneously, there has been a constant hike in the total value staked, with the metric showing an almost vertical uptick at the time of writing.
Source: Glassnode
This rise in outflows pointed to more buying pressure and an increase in HODL positions of traders in order to store coins in their own wallets. In terms of the total value currently staked on the ETH 2.0 contract, over 7 million ETH has been deposited, representing around 6% of the circulating supply.
The trend of ETH being withdrawn from exchanges and deposited into yield-bearing opportunities in the DeFi space is a trend to pay attention to.
Lido rising too
High outflows are indicative of an asset getting moved into cold wallets or possibly being staked or invested in DeFi. Staking has been high, and so have investments in DeFi.
Noticeably, a reasonable volume of Ethereum is being transferred to the Ethereum 2.0 staking contract. This assertion can be evidenced by the rise in Lido deposits. These have continued to skyrocket, hitting 12% of the total staked supply this week.
Source: Dune Analytics
DeFi project Lido is one of the leaders in permissionless staking for ETH. Lido’s governance token LDO is currently valued at a $148M market cap. What’s more, it hiked by 27% in a single 24-hour window.
Ethereum for the gains?
Now, buying pressure has been high and outflows have been supported by staking activity. However, in terms of price action, ETH is still struggling to breach and sustain a position above $3.3k.
A move above that level would mean another run and new staking and outflow ATHs could be in store. Until then, it is imperative to keep an eye on the aforementioned metrics.
