Ethereum’s Beacon Chain Sees Significant Inflows Despite Initial Predictions
Since staking withdrawals were enabled on April 12th, Ethereum’s (ETH) Beacon Chain has seen significant inflows with over $7.7 billion worth of ETH deposited into the contract. This is despite some initial predictions of a flood of outflows following the Shanghai Upgrade.
The Beacon Chain is a core component of Ethereum 2.0, which is the next generation of the Ethereum blockchain. It is a Proof-of-Stake (PoS) blockchain responsible for coordinating validators, validating transactions and proposing and finalizing blocks in the Ethereum network.
Ethereum Beacon Chain Defies Critics
According to research firm Arkham Intel, The total amount of deposited Ether now exceeds the April 12th balance by around 1.25 million ETH, with daily deposits varying widely, sometimes reaching up to 225,000 ETH (over $400 million in a single day). The inflows chart shows a noticeable spike following the Shapella upgrade that coincided with full enablement of withdrawals from the Beacon Chain.
At the forefront of these deposits is Lido’s stETH address “0xae7”, which has consistently been the top depositor with a lifetime deposit amount of well over $15 billion, accounting for over a third of the ETH locked in the deposit contract, according to Arkham. Following the enabling of stETH Unstaking, Lido’s deposit address has now been transferred to a new address, “0xfdd,” which has already become the fourth deposit address since April and has a total deposit amount of over 214,000 ETH or over $386 million despite only being active for three days.
The growth of Ethereum 2.0 and Beacon Chain has also led to an increase in staking services and Liquid Staking Tokens with Frax as one notable player in this space. This stablecoin project aims to provide users with more optionsSponsored Product for earning rewards on their ETH holdings by offering products such as frxETH, which allows users to stake their ETH and receive liquid-staked ETH tokens (sfrxETH) in return.
Although Frax ranks 14th on the leaderboard of depositors, its total stake of 72,400 ETH since April 1st represents a significant portion of its total frxETH supply accounting for 33.6% of the total frxETH supply of 215,000.
The growth of staking services and Liquid Staking Tokens is positive development for Ethereum’s ecosystem as it provides more optionsSponsored Product for earning rewards on their holdings. This growth also shows the popularity of Ethereum 2.0 and Beacon Chain that offer an efficient and sustainable network for decentralized applications.
ETH’s Price Action Suggests A Bearish Future
Cryptocurrency analyst Michael Van de Poppe believes that ETH’s price resembles more bear flag than consolidation pattern with higher Relative Strength Index (RSI). When combined with chart patterns, it is likely that ETH will experience another leg down making it more probable than Bitcoin (BTC).
To change his mind about ETH resistance level needs to be broken at $1,867; however if candle closes below $1,735 there is high likelihood continuation toward range between $1,675 to $1,712 where lower support level would be around $1600.
Conclusion
In conclusion despite short-term uncertainty in cryptocurrency market long-term outlook remains positive not only for Ethereum but broader digital asset industry too. While predicting short-term price movements can be challenging Michael Van de Poppe analysis suggests short term outlook may remain bearish while Lido continues being top depositor into Beacon Chain contract showing investors’ confidence in this project.
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