Ethereum introduced burn mechanism in its London Hard Fork update.
Since the update went live, more than 21,000 ETH burnt.
Ether gained 17% since the hard fork.
NEW DELHI (CoinChapter.com)— Ethereum, the second-largest cryptocurrency by market cap, is on a bull run since the blockchain’s latest update went live on August 5. Dubbed as the London hard fork, the update introduced a fee-burning mechanism for Ether, the blockchain’s native crypto. As a result, its prices gained by 17% since the burn started, from August 5’s open of $2,725.31 to August 10’s high of $3,214.599.
In crypto, burning is a process that takes existing cryptocurrencies out of active circulation, thus reducing supply. Theoretically, the reduced supply helps bolster prices, which seems to be working for Ethereum. In addition, the EIP-1559, which includes the burn mechanism, also introduced measures to reduce gas fees on the blockchain.
Ethereum Price Rally
The burning mechanism that EIP-1559 introduced seems to be adding fuel to Ether’s bull run as the crypto continues to paint green candles on the daily chart. ETH went north of $3,000 for the first time, since May 19’s market crash, on August 5.
However, prices pulled back before ETH finally closed above $3,000 on August 7, just two days after the update went live.
Ethereum prices are consolidating above the coveted $3,000 price level. Source: ETHUSD on Tradingview.com
Ether prices are trading above their 50-Day (Yellow) and 200-Day (Violet) Moving Average trendlines, indicating ETH is bullish in short and long-term ranges. Moreover, the 50-Day and 200-Day MA lines are forming a support confluence at $2,234.52.
The 20-Day Exponential MA provides dynamic support for ETH at the $2,618.71 level. Nonetheless, immediate support for Ether’s current bull run lies at $3,005.66, followed by support at $2,856.69.
On the other hand, resistance for Ether is at the $3,200 price level. Once ETH bulls breach above, the next resistance at $3,350 will likely cap any further upside movements, barring an extended crypto rally.
Momentum Oscillators for ETH are bullish, but RSI may worry Ether bulls. Source: ETHUSD on Tradingview.com
Ethereum is charting positive bars on the MACD histogram since July 22. The bars represent the difference between the MACD line (12-Day and 26-Day EMA difference) and the MACD signal line (9-Day EMA of MACD). In detail, when the MACD line moves above the MACD signal line, it denotes a bullish momentum.
While the MACD is strongly bullish for the altcoin, the relative strength index may worry traders. The RSI, a price momentum indicator, is in the overbought region with a value of 73.34. Often, RSI values above 70 (or below 30) indicate a trend reversal may occur soon.
However, Ethereum’s strong daily volumes may alleviate some fears of a trend reversal. Moreover, the RSI trendline is moving downwards and may go below 70 soon.
Ether Burning
As per data from ultrasound.money, the burn mechanism has removed about 21,415.9 ETH ($67.2 million) from active circulation. The burn rate for Ether (24 hours) is 3.12 ETH/min. OpenSea, the leading NFT marketplace, leads the burn leaderboard with 2,620.26 ETH burned. In second place is the automated token exchange, Uniswap, with 1,585.95 ETH burned. Finally, Axie Infinity, the blockchain gaming platform, ranks third with 1,316.13 ETH burns.
Ethereum’s burning protocol cuts into the transaction fee that would have otherwise gone to miners. As such, the update might face some controversies. However, for now, it seems Ethereum is rallying at the $3,000 price level.
Previously, Gas prices on Ethereum were based on guesswork. However, the new update has introduced base gas prices, which the blockchain determines. Hence, everyone would pay the same amount for a transaction unless someone wants to tip a miner for prioritizing their transaction.
Moreover, Ether burns will introduce deflation in its prices, leading to upward movement in prices.
In the future, Ethereum plans to do away with mining altogether by transitioning to the Proof-of-stake algorithm. Hence, stakers will replace miners. The target date for PoS implementation is 31 March 2022.
At the time of writing, Ethereum was trading at $3,116, down 1.50% on the day.
A Delhi-based Markets writer, I did my bachelor's in engineering with major in electronics and communications. I first heard of bitcoin while writing an article about blockchain technology a few years back, and have been following it ever since. Bitcoin may well be current big thing happening in the finance industry, and it feels like the right time to join the crypto bandwagon.
The price of Ethereum (ETH) continues to fall, going below the vital $3000 support. ETH has lost about 20%...
Our Partners
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.