Ethereum bulls are going all out in pushing up prices of the blockchain’s native cryptocurrency, ETH.
Liftoff from the low-$1800 levels on June 27 has translated to a more than 20% runup as of date.
Ether started cranking up higher, especially after buyers succeeded in reclaiming positions past the crucial 20-day exponential moving average (EMA) wave and printed higher highs above the psychological $2000 price level.
This sudden shift in ETH’s market sentiment can be attributed to the upcoming Ethereum Improvement Protocol (EIP) -1559 update. Also known as the London hard fork upgrade, it minimizes the network’s transaction fees. High gas fees have been an embarrassing issue for both developers and users. Especially at the apogee of the decentralized finance (DeFi) boom this year.
EIP -1559 intends to attack the root of the problem by capping fees for a particular transaction (dapp usage or monetary transfer). The said move will result in improved network traffic and increased scalability. Ethereum’s upcoming network upgrade also includes a “transaction fee burn” feature.
It implies that the EIP-1559 code will set in motion a process of extinguishing a portion of fees. Technically speaking, this will result in a “supply scarcity,” which adds to Ether’s long-term bullish outlook since genesis ETH has had an infinite supply. However, EIP-1559 will change that story for good.
The past month was replete with news of Chinese miners leaving their homeland searching for greener pastures elsewhere. It caused both ETH and the aggregated cryptocurrency markets to trim gains from their recent highs considerably. However, with the FUD dialing down, the scenario seems to be changing. It can be seen from the uptick in Ethereum hash rates.
Sudden blackout in mining activity in China had caused average daily hash rates to drop from all-time highs at 643,805.8731 GH/s on May 20. 2021 to 477,535.4945 GH/s on June 26, 2021. The trend has reversed, with mining numbers moving up to 489,268.9778 GH/s. It signals an increase in network activity which is one of the purported reasons driving ETH prices up higher.
BTC TO ETH
ETH has not just gained against the US Dollar but also Bitcoin, the number one cryptocurrency. From the 4-hour chart, it is visible how BTC holders are swapping their holdings for Ether.
Three consecutive giant buy candles printed by bulls recently is reminiscent of a similar scenario that played out towards the beginning of May. Back then, optimistic buyers switched from Bitcoin to the second-largest cryptocurrency and helped pushed prices higher.
Leading crypto industry influencers, too, have observed the trend mentioned above. Crypto YouTube personality Layah Heilpern had this to say today on Twitter, ” My brother wants to sell all his #bitcoin for $ETH… How do I handle this?”
Naturally, this has added to a substantial appreciation of ETH wallets over BTC wallets for the very first time. On-chain market insight providing firm Santiment notes: “#Altcoins have enjoyed quite the major resurgence over the past 36 hours or so. Much of this can be attributed to $ETH’s address activity pop that saw it surpass event $BTC’s.”
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.