ETH Staking Shocker: One-Third of Supply Locked Up!

Staking contracts now hold nearly one-third of the total ETH supply.
Short squeezes are possible through record-leveraged short positions.
Liquidity on exchanges decreases, and major ETH withdrawals persist.

😲 Hold onto your hats, folks! A whopping 29% of Ethereum‘s total supply is now locked up in staking contracts. 💸 Combine that with some seriously high leveraged short positions and a dwindling liquidity in the exchanges, and you’ve got yourself a tense market situation. 😰

Hedge funds are fueling the supply crunch by playing a little game called “futures shorts/ETH spot long” to earn staking rewards, which is about 13% per annum. This move has pushed the leveraged short position to a high of -13,291 contracts, the sharpest decline since the beginning of 2025. 📉

Staking Locks Up Over 29% of Ethereum Supply

Data recorded on the Ethereum blockchain indicates that there is now 121,000,000 Ether staked, which is more than 29% of the entire supply. 😮 This depresses the money supply in circulation to a great extent, hence making liquidity on the high side and further straining the prices. On average, more than 140,000 ETH were taken off to the exchanges in a day, equivalent to around 393 million dollars in value, creating less supply. 💸

It appears that the shortage is being reinforced by the big holders and institutional investors who undergo a procedure of amassing ETH off exchanges. This trend conforms to that of Ethereum to have recovered to close to the current price of $3,000, but it is yet 38 percent below its all-time high of November 2021. 📈

The effect of supply shock will probably increase as Ethereum staking ETFs are likely to be accepted by the end of the year, which could push more capital to staking and reduce the level of liquidity even more. 📉

Market Outlook: Short Squeeze and price leap possible

This degree of staking, together with the records of short positions, forms the situation of a possible short squeeze. When the prices begin to rise sharply, short sellers may be racing to cover their short position, which will be all the fuel the rally needs. Such limitations on supply and staking rewards should propel Ethereum to new heights during this cycle, which is also accompanied by the estimation of a price up to 10,000 dollars. 🚀

However, the basic trade strategy carries risks. Market volatility can result in loss of confidence among investors besides causing a crash like that which was witnessed in Black Thursday in 2020. 📉

The current market arrangement implies that the relationship between supply and demand is becoming more and more fragmented, with stakeholders being a major sink provider. This aspect can also cause the bullish Ethereum market in the event that the demand remains or increases. 📈

2025-07-14 20:55

Staking Locks Up Over 29% of Ethereum Supply

Market Outlook: Short Squeeze and price leap possible

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