Layer 2 Ecosystem: Genuine Scaling
The data is hard to argue with. Total value locked across major L2s — Base, Arbitrum, Optimism, Blast, Scroll — has pushed past $60 billion, more than doubling from last year.
Daily transactions routinely exceed 10–15 million across these networks combined, while mainnet fees remain manageable and user costs stay pennies.
This is no longer developer hype — it's measurable on-chain activity migrating to cheaper venues while still relying on Ethereum for security and settlement.
ETH Supply Dynamics
The EIP-1559 fee-burn mechanism is finally doing what it was designed to do again. Rising L2 activity means more data posted to mainnet, pushing base fees up enough that weekly burns are consistently exceeding new issuance.
Net supply contraction is running around 0.8–1% annualized — modest, but a clear reversal from inflationary stretches during quiet periods.
Combined with steady staking yields around 4–5%, the "ultrasound money" narrative has some on-chain backing again.
Technical Setup
ETH has been consolidating in a well-defined range for months. The $4,200–$4,300 zone has held as strong support on multiple retests, while $5,300–$5,500 has repeatedly capped rallies.
Declining volume and compressing volatility point to a classic coil pattern ahead of summer.
A convincing weekly close above $5,500 would shift the structure bullish, opening $6,500–$7,000. Conversely, a break below $4,200 could target $3,800.
Our View: Still Not Buying
The Layer 2 scaling improvements are legitimately impressive from an engineering standpoint. If adoption continues accelerating, the fundamental case for higher prices is the strongest it's been in years.
That said, none of this changes our core stance on crypto. Extreme volatility, dependence on speculative sentiment, and zero intrinsic cash flows keep digital assets firmly off our investable menu.
We respect the technical progress, but we're not participants — period.