According to Bitwise strategist Juan Leon, the record validator exit queue may intensify ETH selling pressure through DeFi deleveraging and liquidation risks.
On August 17, Ethereum’s validator exit queue climbed to an unprecedented 855,158 ETH. Bitwise senior investment strategist Juan Leon indicated that the surge in withdrawal requests could be contributing to ETH’s recent price pullback. Large unstaking queues have historically pressured ETH prices, as staked derivatives like stETH can trade at a discount, eroding collateral value in DeFi markets. This decline in collateral value can force deleveraging, hedging, and liquidations, while leveraged 'stETH loop' trades may lose profitability, prompting traders to unwind positions and sell ETH to repay loans, further driving market sell-offs.