Ethereum Eyeing $3,000 But There Is This Big Supply Problem

Ethereum
fell
to
as
low
as
$2,100
this
week
before
bouncing,
adding
an
impressive
25%
from
August
2024
lows.
While
there
is
confidence
that
prices
will
continue
expanding,
breaching
$2,800
and
even
the
psychological
round
number
at
$3,000,
other
market-related
events
might
slow
down
bulls.

Ethereum
Network
Unlocking
Over
143,000
ETH

According
to
Token
Unlocks

data,
hundreds
of
thousands
of
ETH
are
in
the
queue
and
are
set
for
withdrawal
today.
On-chain
data
reveals
that
validators
are
preparing
to
withdraw
143,000
ETH
worth
nearly
$350
million.
Another
batch
of
212,000
ETH
will
be
available
for
trading
in
the
coming
days,
which
could
heap
more
pressure
on
prices.

As
of
August
9,
Ethereum
has
a
circulating
supply
of
over
120
million,
according
to
CoinMarketCap

data.
Since
Dencun,
the
network
has
been
inflationary,
meaning
more
coins
are
not
burnt
like
before.

Validators
must
stake
at
least
32
ETH
and
ensure
their
nodes
maintain
a
high
uptime
of
nearly
100%.
At
the
same
time,
according
to
the
network’s
consensus
rules,
validators
should
not
engage
in
outlawed
activities
such
as
banding
to
approve
invalid
transactions.

Failure
can
lead
to
slashing,
where
a
portion
of
their
stake
is
taken
as
a
penalty.
However,
because
they
must
commit
to
keeping
the
network
decentralized,
they
receive
a
portion
of
the
annual
staking
yield.
At
the
same
time,
they
get
a
chance
to
approve
a
block
of
transactions,
receiving
rewards
as
a
result.

The
ETH
expected
to
hit
the
market
will
be
the
yield
from
their
staking
activities.
This
unlock
is
different
from
block
rewards
distributed
roughly
every
13
seconds.

Even
as
the
market
expects
a
supply
spike,
Token
Unlocks
analysts
note
that
these
withdrawals
won’t
necessarily
mean
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
a
cause
for
concern.
Historically,
Token
Unlocks
analysts
observe
that
prices
tend
to
cool
off
whenever
the
Ethereum
network
unlocks
such
a
large
amount
of
tokens
over
a
short
period.
In
the
last
three
months,
unlocks
between
150,000
and
220,000
ETH
coincided
with
price
drops.

Looking
at
the
daily
chart,
Ethereum
is
recovering.
Though
the
downtrend
remains
following
the
unexpected
dip
to
as
low
as
$2,100
early
this
week,
the
bounce
has
been
decent.

The
immediate
liquidation
line
is
around

$2,600.
If
buyers
push
on,
confirming
gains

of

August
8,
ETH
prices
might
rally,
soaking

on

the
expected
deluge,
and
retest

$3,000.

Feature
image
from
Canva,
chart
from
TradingView