PANews reported on August 17th that the Ethereum blockchain validator exit queue has reached 897,599 ETH, a record high, according to data from validatorqueue.com. In response, Juan Leon, senior investment strategist at Bitwise, suggested that the growing queue of ETH waiting to be unstaked may be the reason for the asset's recent pullback. After nearing a record high, ETH, the second-largest cryptocurrency by market capitalization, has lost hundreds of dollars in value in recent days.

Juan Leon explained that the queue of unstaked ETH could negatively impact the price of ETH. "Tokens like stETH can trade at a discount. This discount reduces their value as collateral, triggering risk reduction, hedging, and even liquidations, ultimately leading to a sell-off in ETH spot trading." Juan Leon added that as the redemption queue grows, some trades may close out, especially if the cost of borrowing ETH spikes. When this happens, "leveraged 'stETH loops' trades conducted through liquidity pools on DeFi protocols will no longer be profitable." Leon said: "Traders repay their loans by closing their positions and selling ETH, creating a synchronized selling pressure."