Ethereum holders capitulate at worst levels since 2022 as 34% staked

Ethereum fell 1.8% to $1,891 as on-chain data showed long-term holders realizing losses at levels not seen since the 2022 bear market, Glassnode data shows.

"The intensity of realized losses among long-term holders has reached levels that historically coincide with bear-market exhaustion," a Glassnode analyst said in a July 24 research note.

More than 65% of coins flowing into exchanges are from long-term holders realizing losses, Glassnode data shows. The cohort that bought near the 2025 all-time high of $4,870 has been the dominant source of sell pressure. Ethereum is now trading 61% below that peak.

The capitulation has coincided with a record 34% of ETH supply being staked, reducing available float. If selling pressure exhausts as it has in prior cycles, Ethereum could establish a local bottom, with resistance at $2,100 and support at $1,500.

Record staking absorbs 34% of supply

Staking data from StakingRewards shows 34% of all ETH supply is now locked in staking contracts, up from 33% one month earlier. That reduces the amount of ETH available for trading and has helped absorb some of the selling pressure from exiting holders. Bitmine Immersion added 156,719 ETH over the past month and now controls 4.8% of available supply, according to the firm's disclosures.

The staking yield, currently around 3.2% annualized, has attracted institutional holders seeking yield in a low-rate environment. The growing staked supply creates a structural bid that was absent during prior bear markets.

Derivatives market shows muted conviction

Despite the price recovery from the June low of $1,500, derivatives markets reflect cautious positioning. The annualized funding rate on ETH perpetual futures has struggled to stay within the neutral 6% to 12% range over the past month, according to Laevitas. Sentiment has improved from the negative rates seen in late June, which reflected heavy bearish demand, but traders remain unwilling to pay a premium for long exposure.

A trader placed a $28 million notional long straddle on ETH at the $1,875 strike expiring July 24, paying $852,000 in premium, according to Laevitas. The bet profits from sharp price moves in either direction, a sign that major participants expect volatility to increase rather than a directional breakout.

What comes next

The capitulation pattern mirrors previous bear-market phases where long-term holder selling eventually exhausted, Glassnode said. The key question is whether the selling has peaked. Early signs suggest the liquidation intensity of long-term holders may have begun to decline, with on-chain realized losses starting to moderate.

Absent a larger external shock, analysts see limited downside from current levels. The next event could come from Google parent Alphabet's earnings, with traders watching for AI spending data that could affect risk appetite across markets. Ethereum's path to $2,100 depends on reduced risk aversion across broader markets.

This article is for informational purposes only and does not constitute investment advice.