The staking rate of the Ethereum Proof-of-stake contract (previously known as the ETH 2.0 upgrade) has lately increased, which could be a positive indicator for the cryptocurrency’s valuation.
Ethereum 2.0 Staking Rate Increases in Response to Increased Inflows
As an expert noted in a CryptoQuant post, the ETH staking rate has increased significantly recently as inflows have increased.
The “staking rate” is a metric that indicates how much of Ethereum’s total supply is currently tied up in staking contracts.
Another statistic, the “ETH 2.0 inflow,” provides information on the total number of coins pouring into the contract during a certain time period.
When the value of this indicator jumps, it indicates that a large amount of Ethereum is currently being staking.
Sustaining this pattern can be good for the cryptocurrency’s price, since it indicates that the coin’s available supply is decreasing as more ETH is locked into the 2.0 contract.
Now, here is a graphic that illustrates the trend in the ETH staking rate over the last six months, as well as the inflows:
As illustrated in the graph above, the Ethereum staking rate has been rapidly increasing in recent weeks. This means that a greater portion of the Ethereum supply is now trapped into the contract.
This tendency is also evident in ETH 2.0 inflows, which have just reached record highs. As a result of these coins entering the contract, approximately 9% of the total supply of the cryptocurrency is now locked away for staking.
As previously said, because to demand-supply dynamics, this pattern may be bullish for the coin’s price. The coin’s selling supply essentially decreases as more Ethereum is retained in the contract.
Ethereum’s price is hovering around $3k at the time of writing, up 5% in the last seven days. The cryptocurrency has increased in value by 17% during the last month.
The chart below illustrates the coin’s price trend over the previous five days.
After suffering for the majority of the month, Ethereum appears to have reclaimed the $3k milestone. However, it remains to be seen whether the cryptocurrency can break through the level this time, or if it will continue to decline, as it did earlier in the month.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.