The second largest digital asset in the world, Ethereum (ETH) is grabbing headlines due to a surge in its price as both institutional and retail investors are getting interested in it. This is visible in the spike in net staking inflows over the last week.
There has been significant capital gain in staking in the Ethereum blockchain in the last 7 days which has resulted in this spike in net inflows.
The surge in staking activity means crypto investors are increasingly betting on Ethereum’s Proof-of-Stake (PoS) ecosystem and to gain passive income in returns. This is also boosting Ethereum-based position in the digital asset landscape as its security gets bolstered.
In the last 7 days, Ethereum staking witnessed more than 10,000 net influx of ETH. While 105,000 ETH tokens were withdrawn 115,000 tokens were deposited.
So deposits have gone past withdrawals in the Ethereum network which is a major change from months of net outflows. The rise of ETH staking points towards a spike in optimism and confidence in long-term staking strategy which is an important aspect of the Ethereum blockchain.
A range of factors are responsible for this surge including the recent price rally of ETH, the enhanced staking infrastructure like liquid staking options and the institutional players' sudden interest in the market.
Additionally, the increase in net inflows could also be a reaction from long-term holders’ interest in Ethereum's stability after the merger and their increasing trust in the ecosystem.
This might result in limiting the token in the market as deposits increase which in turn is likely to cause a price rally.
Other key technical indicators like the Open Interest (OI) also gained recently as it touched a new all-time high. The OI of ETH is now valued at more than $13 billion with a 14% spike in the last 4 months.
The funding rates of Ethereum are also showing a positive trend as long-position traders are dominating the market. Hence, the ETH derivatives market is also drawing the attention of crypto investors, which would trigger a short-term rise in the price.
The leverage ratio has hit a new all-time high of +0.40. Since this is calculated by dividing the open interest with the coin reserves of the exchange, it shows a huge spike in leverage positions. This means the risk-taking abilities of traders in Ethereum derivatives trading have also gained massively.
At the time of writing, Ethereum was up 4.19% in the last 24 hours to trade at $3480 with a 67.61% in its trading volume, which touched $46.67 billion, and the market cap rose to $419.53 billion.