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Since the completion of the Ethereum Merge, sentiment among the community has remained positive. There had been no withdrawal mechanisms coded into the hard fork, which meant that the feared dump of millions of ETH into the market did not happen. What had happened is that the amount of ETH that was being staked on the network had continued to grow, now getting close to another important milestone for the network.
Staked ETH Almost At 14 Million
By the time the Merge was to be implemented, there had been more than 13 million ETH already staked on the network. This represented more than 11% of the total circulating ETH supply being taken out of circulation temporarily.
Now, less than two weeks after the Merge was completed, the staked volume on the network is already ramping up. Since September 15th, there have been more than 200,000 ETH staked on the network. This has brought the total staked ETH to 13.979 million, leaving less than 27 ETH left for the network to reach the 14 million mark. This means that the addition of one more validator will push the staked amount above 14 million, meaning more than 11.5% of the total supply of ETH is now staked.
The accelerated rate of staking speaks volumes about the support that Ethereum is getting. Even though there are those who have lamented the network’s move to proof of stake, the improved capabilities of the network point to this being the right direction for it.
Ethereum Wants Another Breakout
The crypto market has been reeling from the crash, but it has seen some meaningful recovery in this time. One of the cryptocurrencies that continues to show great promise even through this bear run has been Ethereum, and this has everything to do with ETH staking.
Since more ETH is being staked on the network and there is no withdrawal mechanism in place, these ETH are being taken out of circulation and essentially reducing the supply. The ETH issuance since the Merge is also down 98%, meaning that the supply of ETH is declining by the day.
All of these point towards an incoming supply squeeze. When taking into account the fact that ETH continues to show accumulation trends and the support forming at $1,300, a breakout towards $1,500 is more likely at this point, as more investors move their coins out of centralized exchanges, as was seen in the last 7 days, the supply will get tighter, causing the value of the cryptocurrency to balloon.
Featured image from Business 2 Community, charts from TradingView.com
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