Ethereum staking tops 33% as locked supply hits record while price weakens

Ethereum's staking rate surpassed 33% for the first time on July 1, locking a record share of supply even as ETH prices remain under pressure.

"The market is absorbing more ETH into staking than new supply is entering circulation," said an analyst at CryptoQuant, which tracks on-chain data. "If demand returns, the setup could trigger a supply squeeze."

The milestone means more than one in every three ETH is now locked in the beacon chain, reducing the float available for trading on exchanges. The Ethereum Foundation separately staked $7.86 million in ETH through Lido, according to on-chain data, as staking activity accelerated despite a deeply negative sentiment backdrop.

The growing divergence between staking inflows and price action mirrors patterns that preceded previous supply squeezes in crypto markets. With exchange balances declining and staking yields attracting long-term holders, the reduced circulating supply could support a price recovery over time — though near-term bearish pressure persists.

The 33% threshold marks a new all-time high for the percentage of ETH locked in staking contracts, a metric closely watched by on-chain analysts as a gauge of holder conviction. Staking has grown steadily since Ethereum's transition to proof-of-stake in September 2022, with the rate accelerating as institutional players and protocols like Lido make participation more accessible.

CryptoQuant data shows that rising staking absorption is reducing available ETH supply on centralized exchanges, a dynamic the analytics firm said historically precedes price appreciation when accompanied by demand catalysts. The current environment, however, lacks a clear demand trigger, with ETH trading in a prolonged downtrend.

The Ethereum Foundation's $7.86 million stake through Lido — the largest liquid staking protocol on Ethereum — signals continued institutional confidence in the network's security model despite the price weakness. Lido dominates the liquid staking market, accounting for roughly a third of all staked ETH.

For traders, the key question is whether the supply-side tightening from staking can outweigh near-term selling pressure. If demand catalysts emerge — such as spot ETH ETF inflows or a broader crypto market recovery — the reduced float could amplify upside moves. Without them, the staking rate may continue climbing while prices stagnate, creating an increasingly coiled spring.

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