On-Chain Commentary
- Ethereum successfully implemented staked ETH withdrawals
- Trend metrics remain strong for most high market cap digital assets
The Shapella network upgrade for Ethereum, a combination of Shanghai and Capella, was successfully implemented last week. All staked ETH, which was previously locked on the Beacon chain, has the ability to join the exit queue and become fully liquid once again, if desired. Since April 13th, the majority of ETH leaving the staking environment has been associated with staking rewards rather than the initial 32 ETH principle. Any validator with more than 32 ETH does not receive additional APY beyond the principal. Most of the completed withdrawals have been from Kraken, whose staking program was recently closed by the SEC. According to Nansen’s on-chain data, approximately 900,000 ETH remains in the exit queue.
Lido, the largest staking provider in terms of ETH held, has tiered withdrawals scheduled throughout May based on the amount of ETH staked. Although the initial wave of staking withdrawals has largely been completed, larger withdrawals will probably continue over the next 45 days. Despite this, there has not been significant selling pressure on Ethereum, with many stakers either re-staking or rotating their Ethereum to another staking service.
Bitcoin and Ethereum continue to show strong trend metrics. Bitcoin has remained range-bound around the $30k level, which has historically served as both a key support and resistance level. The $30k-$34k range is also the target zone for the previous multi-month consolidation. After the Shapella upgrade, Ethereum broke out above $2,000 for the first time since August 2022 and is now at a multi-month high. Outside of the top two, Avalanche has seen a rise in on-chain activity and price since April 1st, with daily active addresses and transactions doubling. When Bitcoin remains range-bound, digital assets lower down the market cap table tend to experience an increase in price activity due to attractive relative value plays.
