Ethereum nears 1 million ETH burn mark as Ether jumps 9%

Key Ethereum Takeaways

• Ethereum blockchain is close to burning 1 million ETH tokens, worth over $4 billion.
• With a burn rate of 10,000 – 15,000 Ether, the 1 million mark is well within reach.
• Burn increasingly making Ethereum a deflationary network.
• ETH jumped 9% amid the development.

PILANI (CoinChapter.com) – Ethereum’s ETH burning feature activated by the London hard fork upgrade took 950,000+ coins out of supply. According to the latest data, the largest smart contract blockchain will have burned 1 million ETH in the next few days.

The development coincided with the ETH/USD’s 8.5% jump on Friday to $4,336 local high, after a drop to $3,957. Bullish traders assessed the burn’s significant effect on Ether’s circulating supply (read deflation) and increased their long positions in anticipation of further upsides.

Related: 3 reasons why Ethereum looks set to rally towards $6K in 2021

Ethereum Nearing The 1 Million Burn Mark

Glassnode revealed that the second-largest blockchain is close to burning 1 million ETH tokens. The EIP-1559 update, which went live on August 5, has removed over 955,000 Ether from the total circulation. The on-chain crypto market analysis and insights provider predicted ETH burning to top 1 million soon.

The daily burn rate has been steadily increasing in the past months since the London fork. With a burn rate of currently 10,000 -15,000 #ETH per day, the 1 million burn mark is expected to be passed within the next few days. #Ethereum

said Glassnode analysts

Circulating Supply Reducing

The analysts observed the burn to affect Ether’s supply trajectory significantly. Due to the implementation of the EIP-1559 upgrade, ETH supply is now 1% lower than the pre-upgrade days.

“The amount of burned $ETH has started to visibly change Ether’s supply trajectory. The circulating ETH supply in the network is now 0.8% lower than it would be without the implementation of EIP-1559.

EIP-1559 was a critical Ethereum update that replaced the blind auction-style fee market with a fixed base fee and priority fee model for the uninitiated. Moreover, it introduced algorithmic determination of the base fee and its subsequent burning upon completing the transaction. As a result, Ethereum largely became a deflationary monetary system. 

Related: ETH jumps 11% as Ethereum miners continue accumulating despite EIP-1559 activation

Ethereum’s deflationary roadmap took a significant turn in September, Glassnode analysts added. Plus, they also opined that the trend could pick pace faster on an appreciation of the burning rate.

“In fact, on a total of 15 days since early September, $ETH has been deflationary – more supply was burned than issued on those days. We could see an acceleration of this trend if the burn rate continues to increase over time.”

ETH/USD Technical Setup

After reviewing the blockchain’s current economic trend, long-term Ethereum investors reinstated their bullish sentiment on the top smart contract platform’s native currency.

Ether’s recent momentum against Bitcoin corroborated the returning upside outlook. As per analysts, a breakout is all it will take to eliminate all possible bearish biases.

Related: Ethereum’s Technical Setup Points to a $5K ETH Price Target

But the setup has remained the same for quite some time. As a result, only a considerable upward push could eliminate ETH’s stagnation against BTC and kickstart the next leg of the rally for the second-largest cryptocurrency.
ETH/USD bulls fought back and picked up the pair from recent bearish situations. However, sellers will remain active until the pair closes above the 50-day moving average wave. $5,200 remains as the next psychological upside target.