The crypto market has shown varied reactions as Changpeng “CZ” Zhao, the CEO of Binance, shares his bullish outlook on Ethereum (ETH) price. With ETH locked on the Beacon Chain reaching an all-time high, many believe that Ethereum’s price would follow suit. Typically, locking or staking causes crypto prices to rise, while token unlocks have the reverse effect.
CZ took to Twitter to focus on locked ETH, highlighting the fact that an increase in locked ETH could lead to a decrease in the overall supply of Ethereum tokens available in the market. CZ’s optimism about Ethereum’s price comes amid staking activities reaching new heights. As of now, the amount of locked ETH includes staked ETH on the Beacon chain, ETH deposited to the Beacon contract, and rewards on the Beacon chain.
Etherscan data shows that over 21.10 million ETH, valued at over $38 billion, have been deposited into Ethereum’s Beacon Deposit Contract. Moreover, staking deposits continue to outrun withdrawals, particularly during the memecoin frenzy. The number of unique staking depositors has increased significantly, standing at roughly 112,000 following the Shanghai upgrade. Active validators have also increased to 566k, with nearly 40k pending validators.
However, despite these positive indicators, ETH price still trades below $1,850 and implied volatility has reached an all-time low. In fact, Ethereum’s price faces a risk of falling to $1,500 if its crucial support level gets breached. Moreover, the expected reduction in ETH staking withdrawal request processing time from 15 days to five days could add selling pressure on the ETH price.
So, will the ETH price eventually rally? Well, it is important to note that implied volatility (IV) for ETH has declined, especially in short-term IV across all terms. Generally, IV dips in a bullish market as volatility falls, but the current overall volatility market remains lower due to macro data’s failure to significantly move ETH price.
At the moment, ETH price is trading at around $1,816, down 3% in the last 24 hours. The market continues to experience liquidation amid uncertainty. Some reports suggest that a breakdown below the crucial Ethereum support could lead to a 17% fall
to $1,500. Therefore, although CZ remains optimistic about Ethereum’s price, the market tells a somewhat different story, leaving investors to make their own informed decisions.
Source: Coingape
