Middle East Crisis: Ethereum Traders Stake $1.3B as ETH Price Enters Risky Zone

Ethereum Price Analysis:

Ethereum (ETH) price dropped as low as $2,366 on Oct 3, driven by the escalating Middle-East crisis, which has triggered a 15% dip within the last 7-days. On-chain data reveals that investors are making large staking deposits on Ethereum’s beacon-chain contracts amid rising market volatility.

As seller-fatigue signals begin to emerge, technical charts provide insights into the likelihood of Ethereum price stabilizing at the $2,300 support level.

ETH Price Plunges 15% Amid Middle-East Crisis

Ethereum and the broader crypto markets performed well in late September 2024, but geopolitical tensions in the Middle East reversed this trend. By Sept 27, as the conflict escalated, global risk asset markets swung bearish, and the cryptocurrency market experienced a sharp downturn.

The market rout began on Sept 27, leading to over $500 million in liquidations within 24 hours. ETH price has since experienced six consecutive days of losses, as depicted by the red candles in the chart below.

From its 30-day peak of $2,719 on Sept 27, ETH price has fallen to $2,319 on Oct 3, reflecting a 15% drop. This is notably worse than the 11.2% decline in the broader crypto market over the same period, as depicted by the TOTAL CryptoCap chart.

This underperformance suggests Ethereum has faced greater sell-side pressure compared to the overall market.

Strategic traders could expect seller fatigue to set in around the $2,300 support level, potentially triggering new buy-pressure from bullish traders and bargain-hunters. This could pave the way for a price rebound.

Major ETH Investors Spotted Staking $1.3B amid Crisis Talks

Despite the price decline, on-chain staking data shows a surge in Ethereum staking activity, often seen as a sign of market confidence. The Ethereum beacon-chain requires 32 ETH for staking, meaning that trends in staking can provide insights into institutional sentiment.

Since the Middle-East crisis intensified around Sept 28, there has been a significant rise in staking deposits.

According to the official beacon chain data, the total staked value stood at 34.44 million ETH as of Sept 28. But since then, that figure has increased by 68,340 ETH, bringing the total staked ETH to 34.5 million ETH at the time of writing on Oct 3. During this 6-day period, more than 2,000 new validators also joined the network, further underlining confidence among institutional investors.

Valued at the current Ethereum prices of around $2,300 per coin, investors have effectively staked $1.57 billion worth ETH in the last 6-days.

The rising staking deposits during this price downtrend could be interpreted as a seller-fatigue signal, and that long-term investors remain confident in Ethereum’s future despite rife geopolitical risks.

More so, increased staking also reduces the circulating supply of ETH on trading platforms, which could help slow the price decline and eventually support a rebound, particularly as ETH remains undervalued compared to the broader market.

Bulls Deploy $90M Leverage to Defend $2,300 Support

As staking deposits rise, suggesting waning sell-side pressure, bulls are also deploying leverage in a bid to defend the critical $2,300 support level.

According to derivatives market data, despite the overarching bearish sentiment, bull traders have mounted significant leverage at the $2,300 price mark.

The Coinglass chart below shows a notable leverage cluster at $2,307, with $91.6 million in long positions. Such a significant cluster indicates that many traders stand to incur substantial losses if ETH dips below this level.

To prevent this, we may see covering purchases as staking deposits reduce market supply, potentially driving a short-term rebound in ETH price.

Ethereum Price Forecast:  Holding $2,300 Could Set Up Early Rebound

In terms of short-term price prediction, the Bollinger Bands indicator on the ETHUSD daily chart reveals that ETH is currently testing the lower band, suggesting an oversold condition. This increases the likelihood of a reversal or at least a consolidation around the $2,300 support level.

Meanwhile, the Detrended Price Oscillator (DPO) reading of -87.98 indicates that the bearish momentum may be waning.

With ETH price testing strong support levels and staking reducing the circulating supply, Ethereum could become a key asset to watch ahead of a potential market recovery. This forecast rests on ETH holding the $2,300 level and the effectiveness of the recent staking activities.

If bullish leverage maintains support and market conditions stabilize, Ethereum could regain ground, potentially targeting the $2,500 level in the short term. However, a break below $2,300 would likely trigger a deeper correction, possibly down to $2,100