Recent data from CryptoQuant shows that staking inflows of Ethereum (ETH) have exceeded 16,000 ETH. This surge in staking activity seems to be followed by drops in Ethereum’s price. It suggests a possible connection between the two.
Staking inflows surpassed a total of 16,000 $ETH“This pattern is visible at the end of July and mid-August, suggesting a potential correlation where large staking events might be influencing or coinciding with price declines.” – By @3AMRTAHA_ Link https://t.co/S2yoOIwbhQ pic.twitter.com/SiN3EvG6fQ
— CryptoQuant.com (@cryptoquant_com) August 16, 2024
ETH Staking Surges Before Price Drops in July and August
The data highlights two significant periods which are typically at the end of July and mid-August. During these periods, a significant amount of Ethereum was put in staking, and shortly after that, price drops in Ethereum was also recorded. This implies the possibility of ETH being staked in large quantities indicating a trend or affecting price decreases.
It has been seen that during such periods there has been a lot of fluctuation in the cryptocurrency’s price and people have started doubting whether the staking inflows are to be taken as a reason for deflation or inflation. The instances where this can be seen are highlighted in red boxes within the data and depict a clear inverse relationship where staking activity is hastily succeeded by declines in price.
Source: CryptoQuant Increased Ethereum Staking Could Impact Supply-Demand Ratio and Price
Although, it is still questionable whether staking directly leads to price declines, the consistency of this phenomenon certainly means that there might be some impact. Traders and investors should pay closer attention to these staking events since they might be the sign of the changes in the Ethereum market.
This connection between staking inflows and price fluctuation, reported by CryptoQuant, shows how the cryptocurrency market is not as straightforward as it appears. It also means that increased staking means changes in ETH supply-demand ratio which, in turn, will influence the value. So, it is always important to be informed and careful in the cryptocurrency market especially when there are major activities such as staking.
