On February 27, the price of ETH soared to a 3-year peak of $3,274, signaling a potential for further growth in the liquidity staking derivatives (LSD) markets.

Lido (StETH) Outpacing Ethereum

In the last 4 trading days, the price of Lido (StETH) has outpaced Ethereum, driven by the emergence of ETH 2.0 re-staking as a leading theme in the ongoing Ethereum price rally.

Liquidity Staking Derivatives (LSDs) Setting Records

Ethereum’s transition to proof of stake consensus has led to the rise of liquidity staking derivatives (LSDs), tokens that represent staked cryptocurrencies. These tokens provide investors with liquidity for their staked ETH coins, mitigating opportunity costs and enabling retail investors to participate without meeting liquidity requirements.

Leading LSDs like Lido (StETH) and Rocket Pool (RETH) are pegged to ETH prices, but during high market demand, their prices can surpass ETH. This phenomenon has been observed in the last 4 trading days, indicating a strong demand for passive income among Ethereum investors.

ETH Staking Balances Surge

Over the weekend, Ethereum’s beacon chain contracts received 205,085 ETH, bringing the total staked coins to 30.9 million. With ETH currently trading above $3,230, the newly-staked coins are valued at approximately $740 million, signaling a bullish outlook for Ethereum’s short-term price action.

Price Forecast and Roadblocks

The rising staking deposits have created market scarcity, positioning Ethereum for a rally towards $3,500. However, a major roadblock at $3,360 could challenge bullish traders. If the price breaks above $3,360, a retest of $3,500 is likely. On the downside, a drop below $3,000 could trigger a bearish reversal.

In conclusion, the surge in liquidity staking derivatives and staking deposits has set the stage for Ethereum’s continued growth. Stay updated on the latest cryptocurrency news on Global Crypto News.

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