Ethereum price set to face selling pressure as Lido unlocks $500M worth of staked tokens
- Lido has announced that 270,000 Ether will be unlocked after May 15, likely increasing the selling pressure.
- The Ethereum likely to be unlocked is equivalent to $500 million at the current price of $1,852.
- ETH price is likely to struggle with selling pressure from mass withdrawals.
Staking protocol Lido announced late Monday that its version 2 update will go ahead on May 15. The update will unlock direct in-protocol Ether withdrawals and enable withdrawal requests.
Also read: Ethereum battles intense selling pressure from spike in ETH deposits to crypto exchanges
Ethereum worth $500 million to be unlocked soon
Lido, a Decentralised Autonomous Organization (DAO) and a liquid staking protocol, said that the update will go ahead on May 15 if it gets the community’s green light in a three-day vote:
A Lido V2 update:
— Lido (@LidoFinance) May 8, 2023
The final on-chain vote for the V2 upgrade is scheduled for this Friday, May 12th.
If no last-minute findings are surfaced and the vote is successful, Lido V2 will be live after the vote enactment on May 15th ️
If approved, the move will allow users holding staked Ether (stETH) to exchange it for Ethereum, leading to a withdrawal of nearly 270,000 Ether. Lido will fulfill initial withdrawal requests without any additional waiting time for users.
At the current price of $1,852, the unlock will amount to more than $500 million in Ether. The unlocking of such large volumes of Ethereum is likely to increase the selling pressure on ETH.
Although the exact quantity that will be unlocked isn’t clear yet, a big amount could lead the altcoin’s price to suffer selling pressure across exchange platforms.
Ethereum price likely to face further declines
Ethereum price is in an uptrend that started in June 2022. ETH price is close to the 23.6% Fibonacci level of $1,838. The altcoin’s price fell sharply from the 2023 peak of $2,134. In the event of a decline, Ethereum price could find support at $1,733 and $1,640, two levels that have previously provided a base to the altcoin.
Ethereum’s 200-day Exponential Moving Average at $1,687 is another key support level for the native token of the smart contract network.
ETH/USD one-day price chart
If Ethereum price breaks past resistance at $2,015, its bullish target is the 2023 peak of $2,134. Likewise, a decisive close above the $2,015 resistance would invalidate the bearish thesis
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
