Recurring market commentary on what’s happening in the crypto markets, summarized by the Crypto Broker team at Crypto Finance AG.
Market commentary
Good morning!
Bitcoin (BTC) and Ethereum (ETH) are up 9.8% and 12.9% on the week. ETH is currently trading at $2,116, up 13% on the week. On Wednesday night / Thursday morning, the Ethereum network successfully executed its Shapella upgrade. ETH/BTC, currently at 0.068, has recovered nicely after testing 0.062 a few times over the last couple of weeks.
Ethereum rises after successful upgrade
What we have learned once again this week is that the bears and overthinkers usually prove to be good contrarian indicators. Countless predictions were made in the past months on the horrific short-term effect the Shapella upgrade would have on the supply and price of ETH. So far, an event predicted to be extremely bearish on the price of ETH has proven to be extremely bullish. While this upgrade has a clear impact on the security of the network, the withdrawal and deposit figures are what are the most eye-catching at this point. Please note that there are a few different sources showing validator information.
Today’s figures come from a dashboard by Token Unlocks. However, Nansen’s shows a more detailed breakdown of what entities are un-staking, while Beaconcha.in shows validator activity. Between Wednesday night and now, a total of 259k ETH were withdrawn, and 110k ETH have been deposited.
Most of the ETH withdrawn have been accrued rewards, as opposed to principal ETH added by validators. Another surprising and positive aspect is the amount of ETH that is being deposited. This shows user confidence in the staking mechanism and is likely attributed to the uptick in price. Now that ETH has stolen the show from BTC, we will see altcoins follow suit. ARB and OP are leading the charge for Layer 2s, while Liquid Staking Derivatives RPL, LDO, and FXS are also showing strength off of the back of the staking success.
Macroeconomic developements
US figures released this week helped both the equity and crypto market move higher as the economy looks weaker and inflation seems to be calming down. March CPI YoY came in at 5.0%, lower than the 5.2% estimate. As expected, core CPI increased to 5.6% from 5.5%. Most notably, prices of consumer goods such as eggs and margarine increased the most, while gasoline and television prices came down the most YoY.
In addition to this, PPI YoY saw a large drop from 4.9% to 2.7%. PPI MoM dropped by -0.5%; a 0.1% increase was expected. Lastly, initial jobless claims came in higher than expected at 239k. DXY decreased to a two-month low of 100.8, as investors see an end to the Fed's rate hiking cycle after the next FOMC meeting.
Happy Trading!
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