Ethereum breaks $2,500... Staking hits all-time high, will it soar to $2,800?

▲ Ethereum (ETH) ©

Ethereum (ETH) has broken through the $2,500 resistance level, opening up the possibility of an ascent towards $2,800. Expectations for a supply reduction are growing as network staking volume has reached an all-time high of 43.8 million ETH and corporate holdings have expanded. However, it remains uncertain whether the upward trend can be sustained, as over $1 billion has flowed out of Ethereum spot ETFs in October alone.

According to investment specialized media TradingNews on October 21 (local time), Ethereum traded at $2,518 that day, rising 5.8% compared to the previous morning. This marks the first time since October 14 that it has surpassed $2,500, moving above both the 20-day Exponential Moving Average (EMA) of $2,499.61 and the 50-day EMA of $2,482.02. The recovery in risk asset investment sentiment due to the strength of US tech stocks and a short squeeze led to the rise. In fact, over $90.67 million in positions were liquidated in the Ethereum derivatives market within 24 hours, with short position liquidations accounting for $62.39 million, or approximately 69%. The Open Interest in perpetual futures ranged from $43.84 billion to $44.6 billion, amounting to 14.7% of its market capitalization.

A key factor supporting the upward trend is the expansion of staking. The staking volume on the Ethereum network has reached an all-time high of 43.8 million ETH, accounting for 35.9% of the total supply, with an additional 1.33 million ETH awaiting entry into staking. Bitmine Immersion Technologies, the world's largest corporate holder of Ethereum, has secured 6,041,481 ETH, holding approximately 4.9% of the total supply. Notably, on the 21st, it additionally staked 159,728 ETH worth $390.6 million, increasing its total deposited amount to approximately 5.23 million ETH. The media analyzed that the expansion of staking is reducing the circulating supply available for trading, thereby absorbing some of the selling pressure from spot ETFs.

Conversely, the ETF fund flow from institutional investors shows a distinct bearish trend. US Ethereum spot ETFs recorded net outflows for 13 out of 14 trading days in October, with cumulative outflows reaching $1.08 billion. On October 20, an additional $26.13 million flowed out, continuing a five-consecutive-day net outflow. During the same period, while $211.2 million flowed into Bitcoin (BTC) spot ETFs, $388.9 million flowed out of Ethereum spot ETFs, confirming a shift of institutional funds towards Bitcoin. Furthermore, the US 10-year Treasury yield of 5.12% significantly surpasses Ethereum network staking yields of 2.63%, restricting institutional capital inflow.

The future turning point for Ethereum's price hinges on whether it can maintain support at $2,500. The media predicts that if it maintains $2,500 based on the daily closing price, it could rise to $2,578, then to $2,650-$2,700, and if it breaks even the $2,730 resistance level, there's a possibility of reaching $2,800, approximately 11.2% higher than the current price. Conversely, if it falls below $2,482, it is expected that $2,445-$2,450 and $2,400 will act as key support levels. In the event of further decline, there is a risk of correction down to $2,362. The media diagnosed that Meta's earnings announcement, ETF fund flows, and the Federal Reserve's (Fed) interest rate decision on October 28 are key variables that will determine the future direction, stating that despite the expansion of staking, the outflow of ETF funds must cease for a sustained upward trend.

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