OVERVIEW

Ethereum Not ‘Sound’ Money?

Everybody got spooked today after some Fed speakers - specifically Lorie Logan - expressed uncertainty about the current tightness of U.S. monetary policy, suggesting it may not be sufficient to lower inflation to the Fed's 2% target. 👀

In today’s Litepaper: A look at Ethereum, Near Protocol, and Dogecoin’s charts as we move into the weekend. 📰

Also on deck: A look at CryptoQuant’s phenomenal research into why Ethereum might not be the sound money we’ve been told it is.

Before we dive in, here’s today’s crypto market heatmap:

And here’s a look at crypto’s total and altcoin market cap YTD:

TECHNICAL ANALYSIS
Good Chunk Of Crypto At Make Or Break Levels

Near Protocol final broke out above the upper trendline on May 4, pulled back to retest that breakout on the 8th before getting halted against a strong resistance level at $7.50. Bulls are looking for any daily close at or above $7.50 to put $NEAR another clear leg higher. 🦿

Bears, on the other hand, are looking for a nice bull trap to develop if they can return NEAR back below the trendline, but preferably below the most recent major swing low near $6.00.

There’s a falling wedge on $ETH’s daily chart, but price is getting uncomfortably close to the lower trendline for bulls. A daily close below the trendline at $2,860 could be one hell of an ugly trip south. ↘️

$DOGE is looking kind of iffy where it’s currently trading. At the time of writing, there are roughly 1.5 hours left before the daily resets - which is plenty of time for sellers to create a bearish engulfing candlestick on the daily chart.

The road to a clear breakout here isn’t easy for bulls or bears. Bulls need a clear daily close above $0.1620, and bears need a daily close below $0.1300. 😓

NEWS
Ethereum Not That Sound? 😱

CryptoQuant's latest scoop paints a rather bleak picture for Ethereum's ($ETH) aspirations of being the better, buffer version of Bitcoin's ($BTC) "sound money" mantra. 🦻

Let's just say the recent Dencun upgrade has shifted Ethereum from potentially "Ultra sound" to just "kind of noisy." Why? Because the upgrade triggered a drop in transaction fees—which sounds great for users, but not so great for the ETH supply.

Here's the issue: lower transaction fees mean less ETH burning, and less burning means more ETH floating around. Thanks to this upgrade, Ethereum's transaction fees have taken a dive, now sitting at a median four times lower than pre-upgrade levels for the same network activity. What's the result? The amount of ETH burned has slumped to its saddest post-Merge levels, causing the ETH supply to balloon at a pace unseen since the Merge.

Now, for a little history lesson: the "Ultra sound money" concept was Ethereum's way of one-upping Bitcoin. Coined by Ethereum researcher Justin Drake in a 2020 X post, it suggested that Ethereum could outshine Bitcoin by not just maintaining its purchasing power but actively shrinking its ETH supply. Initially, post-Merge data from September 2022 seemed to support this, with the total supply of ETH shrinking by about 0.3%. This deflation was driven by hefty fee burning outpacing the new ETH being minted. 🏸

However, since the Dencun upgrade, it seems Ethereum's fee burning is no longer tied to network activity. Despite bustling activity, the fees—and consequently the ETH burn rate—have plummeted. This change is evidenced by a not-so-joyous chart that shows ETH's newly positive supply growth, the fastest it's been since the Merge.

CryptoQuant might suggest that for Ethereum to resurrect its "Ultra sound money" narrative, it'll need a surge in network activity, which seems unlikely for now. So, as it stands, the deflationary dream might be on pause unless Ethereum can find another way to turn down the volume of its expanding supply. 🔈

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NEWS
Crypto News In Three Sentences 📰

🚀 Bitcoin's Million Dollar March

Jack Dorsey throws another hat into the $BTC ring, predicting the cryptocurrency will moon to a cool million by 2030. While his bullish stance is grabbing headlines, he's equally jazzed about the Bitcoin community's synergy, claiming every contributor boosts its collective value. Simultaneously, Dorsey cut ties with Bluesky, the decentralized platform he founded, criticizing its drift towards centralization. More from Cointelegraph.

🔍 Tether Tussle with Deutsche Bank

Tether ($USDT) is pushing back against a Deutsche Bank report that paints a grim future for stablecoins, citing a lack of transparency and speculative risks. The report, analyzing centuries of currency pegs, suggests most stablecoins won't last, a claim Tether counters by questioning Deutsche Bank's own transparency and citing its substantial fiat-backed reserves. This financial face-off highlights the ongoing debate over the stability and transparency of digital currencies. CoinBriefing has more.

📈 SocialFi Surge on Base

Franklin Templeton points to Friend.Tech and its SocialFi applications as key drivers behind the rapid growth of Coinbase's ($COIN) Base, an Ethereum ($ETH) Layer-2 solution. With Friend.Tech's latest upgrade and token airdrop, Base's transaction activity is buzzing, especially around SocialFi interactions, though security issues in its meme coin sector lurk as potential threats. From BeInCrypto.

🌐 Eclipse Founder Steps Down Amid Allegations

Neel Somani, founder of Ethereum ($ETH) scaling solution Eclipse, is temporarily stepping down amidst swirling sexual misconduct allegations. While maintaining his innocence, Somani's step back hopes to let the truth surface without his leadership overshadowing Eclipse's mission. This development casts a shadow over Eclipse just as it gains traction in the blockchain community. More from CoinDesk.

🖼️ Solana's NFT Market Dilemma

Solana's ($SOL) NFT scene is witnessing a paradox; trader numbers are hitting new highs, yet total sales volume is on a decline, influenced by the dipping SOL prices. This surge in participation does not translate into higher sales, hinting at a cautious market sentiment possibly due to the lower valuation of SOL. AMBcrypto has more.

📊 Polkadot's Engagement High Despite Market Blues

Polkadot ($DOT) is seeing unprecedented user engagement, with record-breaking active addresses even as its token price sags, indicating strong network activity disconnected from market valuation. Most of this activity is attributed to Moonbeam, a parachain contributing to the ecosystem's vibrancy. Despite the active participation, DOT's price struggles mirror the broader crypto market's challenges. From CryptoSlate.

🌐 Toncoin's Market Surge Amid Anticipation

Toncoin's ($TON) value is surging, up nearly 13% today, fueled by excitement over upcoming token launches and significant exchange support. This boost in Toncoin's market cap comes as major exchanges like Binance and OKX prep to offer hefty staking rewards, increasing demand for TON. Despite the general market's stagnancy, Toncoin's price action reflects a keen investor interest in new and promising network developments. More from Decrypt.

Links That Don’t Suck 🔗

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🤖 Lifelike robot invasion: Inside China’s insane humanoid factory

⚗️ Botanix Labs secures $11.5 million funding to develop Bitcoin-native DeFi ecosystem

🚓 Experts: SEC leveraging “lack of regulatory clarity” in crypto crackdown

🏛️ Joe Biden is trying to ‘Kill crypto’, says Cardano creator

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