Ethereum fell as low as $2,100 this week before rebounding to add an impressive 25% to the August 2024 lows. While there is confidence that prices will continue to rise and break through $2,800 and even the psychological round number of $3,000, other market-related events could slow the bulls down.

Ethereum Network Unlocks Over 143,000 ETH

According to Token Unlocks factsHundreds of thousands of ETH are queued and will be withdrawn today. On-chain data reveals that validators are preparing to withdraw 143,000 ETH, worth nearly $350 million. Another batch of 212,000 ETH will be available for trading in the coming days, which could put more pressure on prices.

According to CoinMarketCap, Ethereum’s circulating supply exceeded 120 million as of August 9. factsSince Dencun, the network has become inflationary, meaning that not as many coins are being burned as before.

Validators must stake at least 32 ETH and ensure their nodes maintain a high uptime of nearly 100%. At the same time, validators are prohibited from performing prohibited activities, such as banding to approve invalid transactions, according to the network’s consensus rules.

Failure can lead to slashing, where a portion of their stake is taken as punishment. However, because they have to commit to decentralizing the network, they receive a portion of the annual staking revenue. At the same time, they get the chance to approve a block of transactions, which results in rewards.

The ETH that is expected to come to market will be the proceeds of their staking activities. This unlock differs from block rewards which are distributed approximately every 13 seconds.

Even if the market expects a spike in supply, Token Unlocks analysts note that these withdrawals do not necessarily mean they are being liquidated. However, if they are sold, the recovery will likely be slow.

Will the bulls take over and push prices above $3,000?

There is reason to worry. Historically, Token Unlocks analysts observe that prices tend to cool down when the Ethereum network unlocks such a large amount of tokens in a short period of time. Over the past three months, unlocks between 150,000 and 220,000 ETH have coincided with price drops.

Looking at the daily chart, Ethereum is recovering. Although the downtrend continues after the unexpected dip to $2,100 earlier this week, the bounce has been significant.

The immediate liquidation line is around $2,600. If buyers continue, it will confirm profits by August 8, ETH prices may rise, on the expected floodand test again $3,000.

Main image from Canva, chart from TradingView