Amid heightened market turbulence, Ethereum (ETH) price has consolidated about $1,750, down 3% from last week’s peak. An in-depth analysis of the on-chain data shows that increased staking activity has helped ETH avoid drastic retracement. How will the upcoming Fed Rate announcement impact ETH price action?
Compared to the 13% decline in the global altcoin market capitalization, Ethereum (ETH) price has shown significant resilience over the past two weeks. Growing demand from concerned altcoin investors and rising ETH staking activity have been pivotal to ETH’s strong performance.
Currently, the markets have priced in a 78% possibility of a Fed Rate pause. How could the impending Fed Rate announcement impact ETH price action in the coming weeks?
Ethereum Staking Activity Still on the Rise
After reaching an all-time high in May, staking activity across the Ethereum ecosystem has continued to rise in June 2023. Glassnode’s Supply in Smart Contracts metric measures staking activity by tracking the percentage of total ETH in circulation that is currently staked across various protocols.
Between June 1 and June 12, crypto investors have staked another 360,000 ETH coins across the Ethereum Beacon chain and DeFi smart contracts.
Ethereum (ETH) Price Action, June 2023. Supply in Smart Contracts. Source: Glassnode
When a coin’s Supply in Smart Contracts increases, it reduces the amount available to be traded across exchanges. This momentary market shortage is likely to trigger positive ETH price action.
Notably, United States Fed will announce the next Interest Rate decision on June 14. If the Fed announces rate cuts or a rate pause, as expected, ETH staking activity is expected to rise even further in the coming weeks.