Ethereum continues to struggle to regain its footing following a recent sell-off. The current market narrative is shifting away from technical developments and toward two concrete challenges: a significant correction in staking data and sustained capital withdrawals from spot exchange-traded funds (ETFs). These factors are central to understanding the available supply of ETH and the resulting price pressure.
Institutional Selling Pressure Remains Unabated
A persistent source of selling pressure is coming from institutional investors. Data from SoSoValue indicates that U.S. spot Ethereum ETFs experienced net outflows totaling $161 million in the week leading up to February 13. This marks the fourth consecutive week of negative flows. Notably, BlackRock’s iShares Ethereum Trust (ETHA) led the withdrawals, accounting for $113 million in outflows alone.
This trend has continued into the current week. According to Traders Union, an additional net outflow of $42.5 million was recorded on February 18. This consistent institutional selling pressure contradicts hopes that the market would naturally stabilize at lower price levels. The impact is reflected in ETH’s performance, with the asset down 33.78% over a 30-day period.
The “50% Staked” Narrative Gets a Reality Check
Market discussions were recently fueled by a report from the on-chain analytics service Santiment, which suggested that over 50% of Ethereum’s total supply had been deposited into the staking contract. This initially pointed to a severe supply squeeze, implying a large portion of coins was effectively removed from the market.
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However, a crucial clarification emerged within the last 48 hours. Analysts from CoinShares and other research firms pointed out that the “50%” figure refers to cumulative historical deposits and does not account for withdrawals. Luke Nolan, a researcher at CoinShares, clarified that the active staking volume contributing to network security is approximately 37 million ETH, representing about 30.8% of the supply.
This distinction is vital for investors. The actual liquid supply potentially available on exchanges is significantly larger than the initial narrative of “50% permanently locked” had suggested.
Key Technical Levels Under Scrutiny
From a technical perspective, market observers view the situation as fragile. They argue that Ethereum must reclaim the price zone around $2,000 to improve its outlook. Analysts have identified $1,820 as the next critical support level. On the upside, the $2,100 mark is seen as a key hurdle; a break above this level would be necessary to invalidate the current downtrend.
In the short term, two primary factors are setting the tone: a more sober assessment of the staking-induced “supply shock” and the persistently negative fund flows from ETFs.
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