“Ethereum close to burning 1 million ETH as Ether jumps 9%” Image by Credit: BeatingBetting.co.uk via Flickr
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.
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
10,000 – 15,000 ETH burned per day. Source: Glassnode/Twitter
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.
Ether circulating supply down 1% from pre-London hard fork phase. Source: Glassnode/Twitter
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.
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.
Have been waiting for this breakout forever. Chart has been unchanged since the lows almost a year ago outside the diags
This would invalidate any bear thesis I have short to mid term on the market if it can finally breakout pic.twitter.com/dkRKmEUOpw
— Pentoshi Won’t Dm You. hates Dm’s. DM's are scams (@Pentosh1) November 19, 2021
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.
Himadri is an active investor in cryptocurrencies and upcoming blockchain technology projects. He has been a part of the digital asset space since 2017 and has held multiple positions as Social Media Manager, Assistant Editor, Sponsored Content Manager, Cryptocurrency Journalist roles in reputed news outlets like NewsBTC, Bitcoinist and CryptoPotato. He has also helped numerous blockchain projects gain prominence through terse and succinct marketing/technical content. Himadri comes with a marketing and engineering background, and has worked with reputed names such as GE Healthcare, Volvo Trucks and Polycom before moving into crypto.
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