Reading 3 min Views 1 Published Updated
Beacon Chain Ethereum (ETH) has seen a significant influx of funds since takedowns were allowed on April 12, with over $7.7 billion worth of Ethereum invested in the contract. This is despite some initial outflow forecasts after the Shanghai upgrade.
Beacon Chain is the core component of Ethereum 2.0, the next generation of the Ethereum blockchain. It is a Proof-of-Stake (PoS) blockchain responsible for coordinating validators, verifying transactions, and offering and finalizing blocks on the Ethereum network.
Ethereum Beacon Network Challenges Critics
According to research firm Arkham Intel, the total amount of Ether deposited currently exceeds the April 12 balance by about 1.25 million ETH, with daily deposits varying widely, sometimes reaching 225,000 ETH (over $400 million in a single day). The inflow chart shows a noticeable spike after the Shapella update, which coincided with the full inclusion of withdrawals from Beacon Chain.
Beacon Chain betting inflows. Source: Arkham Intel on Twitter.
At the forefront of these deposits is Lido’s stETH address “0xae7”, which has consistently been the largest contributor with a lifetime deposit amount in excess of $15 billion, which is more than a third of the ETH locked in the deposit contract, according to Arkham.
Following the inclusion of stETH Unstaking, the Lido deposit address was moved to the new address “0xfdd”, which is already the fourth deposit address since April with a total deposit of over 214,000 ETH or over $386 million despite only being active for the last three days.
In addition, the rise of Ethereum 2.0 and Beacon Chain has been accompanied by a surge in staking services and Liquid Staking Tokens with Frax. This stablecoin project aims to provide a more stable and reliable alternative to traditional fiat currencies, being one of the notable players in the field. Frax offers a product called frxETH which allows users to stake their ETH and receive liquid ETH tokens (sfrxETH) in return.
Although Frax is ranked 14th on the contributors leaderboard, their total holding of 72,400 ETH since April 1 represents a significant portion of their total Frax ETH supply, accounting for 33.6% of the total frxETH supply of 215,000.
The rise of staking services and liquid tokens is positive for the Ethereum ecosystem as it provides more opportunities for users to earn rewards on their ETH holdings. This growth is also a testament to the popularity of Ethereum 2.0 and Beacon Chain, which offer a more efficient and resilient network for decentralized applications.
ETH Price Action Suggests Bearish Future
According to Michael Van de Poppe, a well-known cryptocurrency analyst, the ETH price looks more like a bear flag than a consolidation pattern. He believes that the Relative Strength Index (RSI) is higher for ETH, and combined with the chart pattern, it is likely that ETH will experience another drop, making it more likely than Bitcoin (BTC).
Van de Poppe notes that in order for him to change his mind about ETH, the resistance level that needs to be broken is $1,867. However, if the candle closes below $1,735, there is a high chance of continuation towards the $1,675 to $1,712 range, with the lower $1,600 being the next potential support level.
Despite the current short-term uncertainty in the cryptocurrency market, the long-term outlook for Ethereum and the digital asset industry as a whole remains positive. However, while it can be difficult to predict short-term price movements, Michael Van de Poppe’s analysis suggests that Ethereum’s short-term outlook could be bearish.
Lateral ETH price movement on a 1-day chart. Source: ETHUSDT on TradingView.com.
Featured image from Unsplash, chart from TradingView.com