While buying interest in Ethereum may be losing momentum, the staking ecosystem has been experiencing significant growth over the past few months. Following a period of steady rise, the quantity of ETH locked away in staking contracts has reached a critical landmark that could impact its market outlook.
Over Half Of All Ethereum Now Staked
Ethereum’s price has fallen below the $2,000 mark once again as Wednesday drew to a close. During the waning price action, the network seems to have reached a historical inflection point, as shown by the massive staking ecosystem growth.
In an X thread, Everstake, a leading and responsible validator, has outlined a crucial landmark for ETH, which could play a role in shaping its future. ETH staking activity just exploded, with more than half of the entire supply being locked away in staking, marking the first time in its history. With the switch to proof-of-stake, Ethereum’s staking participation has increased steadily. However, its economic design enters a new phase when it surpasses the 50% of all supply.
Everstake’s report is solely derived from data from Santiment, a popular on-chain data analytics platform. Data from the platform shows that the proof-of-stake contract on Ethereum now controls 50.18% of the total historical ETH issuance. Beyond just being a remarkable figure, it represents a key milestone in the project’s 11 history. In other words, this implies that the majority of ETH is no longer circulating or active in the market.
When over 50% of the supply is being locked away in staking contracts, the liquid supply reduces, and fewer coins become available for trading. Such patterns often ignite sentiment as they decrease selling pressure and create a market sensitivity to new demand. At the same time, the development indicates conviction from long-term holders.
Users are determined to secure the network rather than carry out trades in short-term volatility. Everstake remains confident that this is a structural shift for Ethereum. It’s reducing supply coupled with steady or growing demand points to robust price dynamics for ETH over time. “It doesn’t guarantee an immediate pump, but it changes the foundation the price is built on,” the firm stated.
A Market That Has Fallen Into Cold Levels
After an analysis of the MVRV Z-Score, RVT, and NUPL, Alphractal disclosed that the Ethereum market temperature is near cold levels. Specifically, this key metric measures whether the market is overheated or oversold, providing insights into risk-elevated periods and when asymmetry favors long-term positioning.
When it gets close to zero or falls below, it indicates that the market has calmed down. Historically, readings below 0 typically precede a phase where risk and speculative are flushed, increasing the potential for long-term accumulation even as price declines.
These zones underscore periods of reduced unrealized profits, triggering a balanced valuation and removing emotional excess from the market. In the past, major expansion phases have been preceded by extended positions in cold temperature zones, as weaker participants gradually exit and stronger hands progressively accumulate.
Featured image from Pixabay, chart from Tradingview.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
