Ethereum Faces Selling Pressure On Charts While Supply Remains Locked

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Ethereum is navigating a challenging market phase, with price facing persistent selling pressure despite a tightening supply landscape. On the charts, ETH has shown signs of weakness, with repeated rejections at key resistance levels and declining momentum suggesting that sellers remain in control in the short term. A significant portion of the ETH supply remains locked across staking contracts, effectively reducing the amount of liquid ETH available on the market. Locked Supply Continues To Tighten Circulating Ethereum

Ethereum is experiencing selling pressure on the charts, but supply is being locked away through staking. An analyst known as Sjuul AltCryptoGems on X has pointed outthat nearly 3 million ETH is reportedly waiting to be staked, with the entry queue stretching to around 50 days. Related Reading Ethereum Supply Tightens As Staking And Outflows Hit Record Highs 4 days ago

At the same time, the exit queueis almost empty, indicating that very few participants are withdrawing their holdings, which is a clear imbalance. If confidence were weak, exit activity would rise, and staking demand would slow down, but the opposite is playing out. Source: Chart from Sjuul AltCryptoGems on X

Investors are continuing to lock up their ETH for months with a yield of around 2.7%. The total staked has now surpassed 38 millionETH, accounting for over 31% of the total supply,  and the figure continues to grow despite the price trend lower.

This divergence highlights a key dynamic. While the ETH price is showing weakness, the network participation is signaling strength. There are long waiting times to enter staking and almost no waiting time to exit. This kind of disconnection doesn’t last long. Right now, supply is being locked from circulation while demand is building. How Ethereum Long And Short Positions Shrink Across The Board

The recent price weakness in Ethereum may be largely driven by a shift in positioning among hedge funds. Accordingto crypto investor CW, data shows that hedge funds significantly reduced their long ETH positions about two weeks ago, particularly on Coinbase Derivatives, suggesting that many have either liquidated their holdings or exited trades to cut losses. Related Reading Ethereum Staking Ratio Hits Record 31.4% As Exchange Supply Crashes To 2016 Lows 6 days ago

This wave of long-position unwinding has added notable selling pressure, with the US hedge funds emerging as the primary force currently weighing on the market. There is a shift in sentiment that contrasts with that of other participants, as the dealers and asset managers are largely neutral or still maintain a slight advantage in long positions. CW argues that a meaningful full-scale rallywill begin when hedge funds turn bullish.

Activity in both long and short positions on Ethereum decreased compared to the previous day. CW has also notedthat the high-leverage long positions are estimated at around $1.1 billion, while short positions significantly outweigh them at approximately $4.22 billion. However, if the ETH pricerises by $100, several short positions would be liquidated. ETH trading at $2,040 on the 1D chart | Source: ETHUSDT on Tradingview.com Featured image from iStock, chart from Tradingview.com