TLDR 📃

• Ethereum's yearly supply growth rate just hit a record low, making it deflationary. How cool is that?
• The bears predicted otherwise, but the Shanghai upgrade actually bumped up the percentage of staked ETH. Go Ethereum!
• ETH's technicals might be bearish, but if it holds steady at $1,850 support, there's still hope for a comeback. If not, $1,400 is coming.
• While the market's been a bit rough, ETH whales are staying cool as cucumbers, and we're even seeing an uptrend in their numbers.
• DeFi on Ethereum took an 11% hit in total value locked, but it's mostly tied to ETH price fluctuations, so don't fret.
• NFT enthusiasts, hang in there! Market sentiment is bearish for now, but we expect the spotlight to shine on NFTs again before long.

Disclaimer: Not financial or investment advice. Any capital-related decision you make is your full responsibility.

The fundamentals are better than ever before 💥

ETHonomics

Stakers keep staking

Here's a fun fact: The number of ETH staked matters because it represents locked-up ETH that’s unavailable for sale. Combine the lock-ups with a decreasing supply, and you've got a recipe for sky-high ETH prices over time.

Now, when Ethereum staking kicked off with the Shanghai upgrade on April 12th, naysayers thought the number of staked ETH would drop as people cashed out. But surprise, surprise — the number of staked ETH actually increased! Before the upgrade, 15.4% of ETH supply was staked, and now it's risen to 15.8%. Turns out the upgrade was a win-win.

And we're not done yet! We're pretty sure the percentage of staked ETH will keep growing, reaching 30%. So buckle up and expect more excitement!

The technicals aren’t as good… 📉

Price analysis

ETH's technicals may be in better shape than BTC's, but they're still looking a bit bearish. We've witnessed a shift in market structure from bullish to bearish, complete with a new daily low and a pesky quasi-bearish engulfing candle (the worst kind). But don't worry, ETH might have a chance to save the day if it can hold on to the $1,850 support level.

Here's the game plan:

1. If ETH can cling to $1,850, we'll see it bouncing between $1,850 and $2,000 until it finally breaks free to the upside, putting us back on the bullish express.
2. But if ETH slips below $1,850, watch out — it could take a tumble, potentially sinking to $1,400.

No matter what happens, we'll keep a close eye on ETH and keep you in the loop. And just between us, we think the second scenario might be more likely, given BTC's current state.

Funding rate

Here's another reason to be excited about ETH over BTC: the funding rate.

The funding rate is the volume of regular payments exchanged between those betting on price increases (longs) and decreases (shorts) in perpetual futures contracts.

The rate has recently gone negative, which is actually a good thing! It signals that a local bottom is close or already here, meaning a bounce could be just around the corner. And wouldn't you know it, this lines up perfectly with ETH's $1,850 support level.

Smart money 💵

All right, let's take a break from the numbers and check in on the whales.

Both BTC and ETH whales are keeping their cool during this market downturn. This chart shows two key points:

1. A downtrend in the number of whales in 2021 — they were busy selling into the rally and cashing in on profits.
2. An uptrend starting mid-2022, with new whales joining in to capitalise on the next bull run. Sure, there's a tiny dip lately, but the overall uptrend is what we long-term investors love to see.

Ethereum ecosystem 🌐

DeFi

If you want a quick snapshot of decentralised finance on Ethereum, this is the table you need:👇🏼

The Ethereum DeFi ecosystem has lost over $3.5B in capital. But don't panic — this 11% drop isn't too crazy when you consider that ETH prices have fallen by 13%. DeFi and ETH are pretty closely tied together, after all.

Want to dig even deeper? Check out our DeFi and L2 digests!

NFTs

Here’s a preview of the NFT digest we’ll publish on Wednesday: 👀

Bearish market sentiment continues exacerbated by the recent climb in ETH and memecoin season. We expect attention to eventually rotate back to NFTs, especially considering the fact that PEPE and WOJACK were both created by NFT communities.

In the meantime there are two viable approaches:

• *Dollar cost averaging into flagship ecosystems like *******************.

• ******** out and ****************.

If you have limited funds we would advise option 2 as the safer strategy.

Stay tuned!

Cryptonary’s take 🧠

With ETH's yearly supply growth rate hitting a new low of -1%, it's now deflationary and increasingly scarce — excellent news for long-term investors. The percentage of staked ETH defied bearish expectations and actually increased since the Shanghai upgrade.

Although ETH's technicals are currently bearish, there's a glimmer of hope if it can maintain support at $1,850. The negative funding rate may even signal a local bottom and a bounce back. But if the $1,850 support breaks, we could see ETH sliding down to $1,400 soon.

Despite the market downturn, ETH whales remain calm, and there's been an uptrend in whale numbers since mid-2022. DeFi on Ethereum experienced an 11% drop in TVL, which is closely linked to ETH price fluctuations. While NFT market sentiment is bearish for the time being, we anticipate attention's eventual return.

What's your takeaway?

Ethereum is demonstrating resilience in a bearish market, with promising signs for the future. Keep an eye on the $1,850 support level: Its fate could determine whether we see a bounce or a drop to $1,400. Stay informed, watch the market closely, and as always, thank you for reading.