Ethereum’s price experienced a slight increase on May 17, reaching $3,040, which is 6% higher than the low of $2,862 recorded on May 14. However, the surge in ETH 2.0 staking withdrawals poses a threat to the rebound phase.
Compared to the overall crypto market, Ethereum’s price rise has been lagging behind. While assets like Bitcoin (BTC), Solana (SOL), and Pepe (PEPE) have seen significant gains of 9%, 22%, and 70% respectively, the total crypto market capitalization has increased by $194 billion since May 13.
At the moment, Ethereum’s price is hovering around $3,042, showing a 6% increase from May 13. However, when compared to other mega-cap Layer-1 assets such as Bitcoin and Solana, Ethereum has underperformed significantly.
The TradingView chart above illustrates Ethereum’s lagging performance. Additionally, on-chain staking data from the ETH 2.0 beacon chain reveals concerning signals that could lead to intense volatility in Ethereum’s price action in the coming days.
The Validator Queue chart provides real-time insights into the number of investors looking to join the ETH 2.0 staking pool versus those looking to withdraw their funds. On May 14, only 93 stakers sought to withdraw their staked ETH, but as of May 17, this number has skyrocketed to 3,868 addresses.
This 4,000% increase in ETH 2.0 withdrawal requests within three days raises concerns about potential bearish pressure. Additionally, the ETH 2.0 deposit queue has decreased by 97% over the past week, further indicating a decrease in long-term investor confidence.
The combination of increased withdrawals and decreased deposits creates a dual catalyst for downward pressure on Ethereum’s price. This helps explain why Ethereum has failed to keep up with the broader market uptrend this week.
As traders react to the significant spike in ETH 2.0 staking withdrawals, Ethereum’s price is likely to drop below $2,900 in the near future. The Bollinger band technical indicator also supports this pessimistic price forecast.
The upper-limit Bollinger Band indicator shows that Ethereum’s price is still far from reclaiming the critical resistance level at $3,200, which would put bulls in control of the market momentum. If Ethereum’s price falls below the short-term support at the 20-day SMA price level of $3,023, it could trigger a rapid bearish reversal towards $2,825.
Disclaimer: This article provides informational content and should not be considered financial advice. The views expressed in this article are the author’s personal opinions and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses incurred.