 ▲ Ethereum (ETH) / ChatGPT-generated image |
Market concerns are deepening as staking demand, a key pillar supporting Ethereum (ETH)’s price recovery, has recently shrunk sharply.
According to a February 23 report by cryptocurrency-focused outlet BeInCrypto, investor participation in Ethereum staking has fallen to its lowest level in months. Staking helps reduce selling pressure by locking up circulating supply, but declining participation has increased the risk of weakening price support. BeInCrypto noted that this trend could be a decisive factor blocking Ethereum’s short-term price rebound.
Blockchain data analytics firm Santiment reported that the amount of active staking on the Ethereum network is trending downward, indicating that investors are increasingly moving assets to exchanges or cashing out rather than locking them up. Ethereum is currently trading sideways around $1,970, struggling to reclaim the psychological support level of $2,000. However, with reduced staking demand increasing market liquidity, it faces difficulty breaking through upper resistance levels.
Disappointing capital inflows into spot Ethereum ETFs are also being cited as a factor dampening investor sentiment. Market experts suggest that Ethereum’s staking yields have become less attractive compared to traditional financial products, while growing macroeconomic uncertainty is prompting investors to reduce exposure to risk assets. The outflow of staked assets may also be interpreted as a negative signal for network security and activity, potentially triggering a vicious cycle of further price declines.
With limited catalysts for a technical rebound and the added headwind of declining staking participation, caution dominates the Ethereum market. Investors are now closely monitoring staking participation rates and whale wallet movements rather than focusing solely on price fluctuations. For Ethereum to return to an upward trajectory, renewed inflows into staking and a robust recovery in on-chain activity will likely be necessary.
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