The number of Ethereum addresses with 32 or more Ether (ETH) hit a one-month low on November 9.
The number of externally owned Ethereum addresses (EOAs) fell to 108,949 compared to 108,965 on October 22, according to data from Glassnode, a sign that traders and investors ignored the prospects of becoming validators in their upcoming proof-of-stake blockchain network, dubbed Ethereum 2.0.
In detail, staking on Ethereum 2.0 requires users to deposit 32 ETH to a designated smart contract address to become a full node validator. By doing so, the depositor gains the right to manage data, process transactions, and add new blocks to the enhanced ETH blockchain.
That leads Glassnode analysts to treat Ethereum addresses with a balance of 32 or more ETH tokens as “potential validators.”
Only rich Ethereum validators
The recent decline in the number of potential Ethereum 2.0 validators coincides with a steady rally in the price of Ether.
In particular, ETH price increased nearly 37% in the past 30 days, hitting a record high of around $ 4,842 on November 8. In other words, it now costs more than $ 153,000 to become a full node validator on the Ethereum 2.0 blockchain network compared to roughly $ 23,600 at the beginning of this year.
In the meantime, StakingRewards.com data shows that blocking 32 ETH for a year now yields an annual percentage return of 5.42%.
Conversely, holding ETH spot positions has yielded almost 1000% yield on paper in the last 12 months, with the flexibility of taking profits in the face of possible downside risks.
ETH at $ 6K?
The number of Ethereum 2.0 validation addresses has also dropped as Ether gears up for a breakthrough towards $ 6,000.
The latest rise of the cryptocurrency to an all-time high of approximately $ 4,842 comes as part of a Cup and Handle breakout that expects ongoing bullish momentum to continue towards or beyond $ 6,000, as shown in the chart below.
The pattern develops after the price first rises higher and then corrects to form a rounded bottom, called the Cup. There is a rebound towards the previous high, followed by a failed attempt to break above that level.
The price goes back again and creates a smaller rounded bottom, called the Mango. In the end, the price returns to a previous high for the second time and successfully breaks out to move as much as the depth of the cup.
The depth of the Cup of Ether is over $ 2,200, setting your Cup and Mango profit target at around $ 6,100. Should it happen, the cost required to become an ETH 2.0 validator will increase to $ 195,200.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.
Keep reading: