Ethereum 2.0 Stakers Withdraw $170 Million in 5-Days Sparking 15% Correction

Ethereum Price Analysis:

Ethereum price fell 15% in 3 consecutive losing days between Aug 25 and Aug 28. On-chain data trends show how an unusual spike in ETH 2.0 withdrawals may have exacerbated the downtrend.

Ethereum Enters 15% Correction after $2,800 Retest

The global cryptocurrency markets took a downturn on Aug 27, sending Ethereum spiraling to a news weekly-time frame low. Amid the the market downswing, ETH appeared to have booked slightly higher losses compared to the overall altcoin market average.

The chart above shows how ETH price had surged above the $2,820 area on Aug 24, sparking hopes of a $3,000 retest. However, amid intense market volatility on Tuesday, ETH capitulated, sliding 15% to hit $2,398 on Aug 27.

In comparison, the TOTAL3 metric, which captures the total valuation of all actively trading crypto-assets excluding ETH and BTC, only reflects 10% decline during that period.

Ethereum 2.0 Stakers Withdrew $170M in 5 Days

When a systemically important asset like Ethereum underperforms the broader market average, it usually signals the presence of stronger internal bearish catalyst active within the ETH ecosystem.

Looking towards the underlying on-chain data, there has been a significant spike in Ethereum 2.0 withdrawal over the past week. This move may have contributed to the accelerated decline in ETH prices during the market dip on Tuesday.

As seen above, investors held a total of 34,024,414 ETH in the Ethereum 2.0 beacon chain staking contracts as of Aug 23. But at the time of writing on Aug 28, the figure has dropped to 33,956,574 ETH.

This implies that over the last 5-days, investors withdrew 67,840 ETH from the staking contracts. When valued at the current price, this has added over $170 million to the short-term market supply.

Such large withdrawals with a short period can signal a lack of confidence in Ethereum’s near-term prospects, leading other investors to liquidate their holdings.

Without a reversal of this trend, ETH price could be at risk of further downsizing in the days ahead.

ETH Price Forecast: $2,500 Support Still Shaky

The Ethereum (ETH) price is struggling to maintain its position above the $2,500 support level, as recent technical indicators suggest a bearish outlook.

Over the last few trading sessions, the ETH/USD pair has encountered significant resistance near $2,670, as indicated by the Keltner Channel (KC) upper band. The RSI has also failed to recover above the neutral 50 mark, hovering around 39.69, which reflects the lack of buying momentum.

The rejection from the upper Keltner Channel band and subsequent sharp decline highlights the growing selling pressure. This has led to ETH falling below its key moving averages, reinforcing the bearish sentiment.

Given these conditions, the immediate support at $2,500 remains vulnerable. If ETH fails to hold above this level, it could test the lower KC band near $2,392, signaling further downside risk.

Conversely, any attempt to rebound will likely face resistance near $2,670, with the $2,954 mark being a more substantial barrier. As it stands, ETH’s price action suggests that the bears are in control, making the $2,500 support level crucial for the asset’s near-term outlook