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- Ethereum staked recently surpassed 19 million units on the beacon chain despite the Shanghai upgrade enabling withdrawals.
- ETH price dropped about 4 percent on Friday to trade around $1,771.
The Ethereum (ETH) market has held the second most valuable blockchain after Bitcoin despite abandoning the Proof-of-Work (PoW) for the less power-consuming Proof-of-Stake (PoS) via the merge event last year. The transition was cemented by the recent Shanghai/Shapella upgrade that basically enabled withdrawals of staked Ethers.
As a result, the Ethereum ecosystem has increased its chances to be regulated globally as digital money. Moreover, worldwide regulators and institutional investors had glaring concerns over Ethereum’s exponential use of electricity.
On the technical side, the Ethereum network gained more scalability without compromising the security and decentralization aspect. In any case, the Ethereum network is more decentralized as the entry level for staking has significantly been reduced through liquid staking programs like Lido DAO (LDO).
Ethereum Staked at ATH
Following a successful Shanghai upgrade on April 12, there was a general fear consensus that staked ether could drop dramatically in subsequent days. Interestingly, on-chain data shows more Ethereum holders are staking their coins to earn passive gains while preserving value over global inflation. According to a recent revelation by blockchain data and research platform Nansen, the total ETH staked on the Beacon chain reached an ATH of about 19,375,242 units
ETH locked* hit an all-time recently at 19,375,242 ETH
When you zoom out, the withdrawals seem like a dip for ants
*All ETH that is "out of circulation":
• ETH staked on Beacon chain
• ETH deposited to the beacon contract but not validating yet
• Rewards on the Beacon chain pic.twitter.com/N1jyR7hcBO— Nansen 🧭 (@nansen_ai) May 9, 2023
According to Binance CEO Changpeng Zhao (CZ), the effects of Ethereum staked at ATH is likely to reciprocate to a price rally. Moreover, locked Ethers are removed from circulation thus reducing the overall supply amid a rising demand with more DeFi adoption. Worth noting that the Binance crypto exchange is one of the largest Ethereum supporters through staking and ERC-20 token listings.
Similar sentiments were shared by popular crypto trader Bob Loukas, with more than 228k Twitter followers. According to Loukas, the Ethereum price is significantly undervalued compared to its developments.
“Given the usage, adoption, dominance, and comparison to caps across the space (as well as tech), $ETH is tremendously undervalued,” Loukas noted.
Price Action
Following increased bearish crypto sentiments in the recent past fueled by the rise of meme coins, Ethereum price closely followed Bitcoin’s in the past 24 hours in a bearish outlook. According to the latest crypto price oracles, Ethereum price dropped as much as 5 percent on Friday, May 12, to hit a low of about $1,747. However, the Ethereum price had since rebounded to trade around $1,771.
In the short term, the Ethereum price is likely to continue on a bearish outlook as more traders flee the volatile markets to protect their capital. In this regard, Cryptojobs founder @TheMoonCarl thinks the Ethereum price could fall as far as $1,550 if the current support levels fail to hold.
CHART: #Ethereum Descending Triangle. If it breaks down, we can retest $1,550. pic.twitter.com/eyDUxmR0RR
— Carl From The Moon (@TheMoonCarl) May 10, 2023
In the long term, the Ethereum price is well positioned to rally above its ATH amid increased mainstream adoption of its smart contracts through the DeFi ecosystems.
