Ethereum (ETH) prices are roughly 18% from the June 2023 lows due to increased ETH betting and massive withdrawals from centralized cryptocurrency exchanges like Binance and Coinbase.
As of June 25, ETH is changing hands at $1,912, stable over the past two days but trading inside a bullish formation following strong gains this week.
Further buoyed by fundamental factors, traders are confident that more price gains could be in store above immediate sell-off levels, including the April 2023 highs at $2,100.
More ethereum staked
According to Etherscan data, there have been more than 216,000 transactions in which users have wagered more than 25.5 million ETH worth more than $48.9 billion at spot exchange rates. Notably, this trajectory has been steadily increasing, indicating support from the broader Ethereum community and confidence in the state of the network.
Ethereum recently switched from a proof-of-work to a proof-of-stake consensus algorithm, which means that instead of miners needing power-hungry equipment to confirm transactions and secure the network, the blockchain relies on validators.
These validators must stake at least 32 ETH on their node and connect to the network for a chance to validate a transaction block and receive 2 ETH blockchain rewards. The Ethereum network awards block rewards and block fees on average every 12 seconds.
On average, on-chain data shows that validators have staked 32.18 ETH, and there are over 630k validators at the time of writing on June 25.
As the amount of ETH has been staked, the number has steadily increased over the months, even after the latest Ethereum Shapella update. In this hard fork, Ethereum allowed validators to unlock their coins for the first time since the Beacon Chain’s phase 1 launch in late 2020.
While there were expectations of price dumps as some validators unlocked their coins and sold them for cash, earning capital gains, the number of Ethereum participants has been increasing, further strengthening the network.
Withdrawals of ETH from centralized cryptocurrency exchanges
With the increase in ETH participants, the additional supply is removed from the circulating supply. Trader confidence is bolstered by increased withdrawals from centralized exchanges. According to Glassnode, the amount of ETH held on centralized exchanges is at all-time lows.
This follows lawsuits by the United States Securities and Exchange Commission (SEC) against Binance and Coinbase, two of the largest cryptocurrency exchanges in the world by number of customers and trading volumes. As a result, some cryptocurrency holders got scared and withdrew their coins from these exchanges and the non-custodial wallets they control.
Coin withdrawals from crypto exchanges are often interpreted as bullish. While Coinbase and Binance have stated that they will defend themselves against the regulator, how ETH prices will react in future sessions remains to be seen.
