A significant accumulation of 620,000 ETH in the unstaking queue has intensified market pressure, driven by large holders withdrawing ETH from Aave and widespread deleveraging of staked Ether (stETH) positions.
Key factors include diminished returns for users employing loop leveraging strategies as expenses escalated, prompting mass unwinding of positions. This deleveraging pushed substantial stETH volumes into the staking withdrawal queue while additional sales caused a 30 basis point deviation from stETH’s peg.
Prolonged strain risks triggering stETH liquidations from accrued interest, potentially exacerbating destabilization of the token’s peg. Market tension is amplified by Ethereum’s unstaking mechanism requiring up to 18 days for completion, delaying resolution.