Ethereum Suffers A Drop Of 24% As Staked Assets De-pegs

On Monday morning, the prices of Ethereum continued to drop, leading to a drop of a massive 24% since late Friday. ETH was exchanging hands at $1,188.97, down 4.55% in the past 24 hours. 

Glassnode, an on-chain analytics provider, reported that the Ethereum market has dropped below the ETH Realized Price of $1,781. This was recorded on June 1 when the asset reached $1,453 and continues to suffer losses since then. 

Interestingly, the realized price of ETH 2.0 deposits was recorded to be, even more, therefore the weekend attack of the bears has led to unrealized losses of over 40%.

Concerns Around ETH Staking 

Many people are worried that the ETH that is currently staked and locked on Beacon Chain will flood the markets following the Merge later this year. It might cause a price drop that is even more severe. But following the Merge, the assets will be made available gradually.

Alex Krüger, the market analyst, noted that ETH dropped back to its previous peak at the time of the 2018 cycle, however it is even below that as of today. 

Technical indicators like the RSI are currently highly penetrated into oversold territory for ETH. The bearish trend only seems to be increasing however the market can witness a minor bounce to the upside, implying even more suffering for Ethereum along with other crypto-assets for a while.

Besides, there are also concerns over staking protocols such as Lido, which has almost a third of the total amount staked. Such centralization could lead to an attack on the network, according to industry experts. 

De-pegging of staked assets is another concern. Users receive an equivalent stETH in return for leveraging as collateral on other DeFi platforms when users stake ETH on Lido. The divergence in the price of ETH and its staking token has occurred due to the major sell-off. According to the data from CoinGecko, the staking token is currently trading 4.4% below its peg.

Ethereum Price Breakdown

A huge breakdown is forecasted by the technical analysts after the formation and confirmation of a head and shoulders pattern. According to this analyst, the gloomy outlook puts the ETH price at around $650.

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