Bulls Take Over Market As Ethereum Price Surpasses $3,000, Why Rally May ContinueAugust 9, 2021
Ethereum has surged forward as London Hard Fork is up and running smoothly. Following the Hard Fork and the implementation of EIP-1559, the price of ETH has continuously run-up, as interest in the Ethereum network grows. The price broke $3K for the first time in over a month during the weekend, which saw the price of bitcoin surge past $44K. ETH price promptly followed the price rally.
Although the price of ETH has fluctuated following this, breaking back down below $3,000, the price has since recovered back up above $3,000. This shows the incredible hold strength being represented at this current price level. Hold sentiments continue to grow across the market.
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Investors remain optimistic for the launch of ETH 2.0 which is scheduled to launch in 2022. Moving the network to a mechanism that sees the energy consumption of the asset cut down by 99.5% is a catalyst for a price surge. This would have solved one pain point for investors and miners alike in the market.
The price rally of Ethereum correlates with a price rally that is currently being experienced across the market. Coins are posting tremendous profit as the weekend closed to usher in the new week.
Ethereum Turning Deflationary
The proper launch of the EIP-1559 presents the asset with the ability to turn deflationary over time. ETH coins are being burned instead of being sent into circulation, which is effectively reducing the rate at which new ETH coins are being sent into the market. The London Hard Fork changes the monetary policy of Ethereum. Transaction fees are no longer being sent to miners. But are now being burned instead.
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The burn rate for Ethereum currently sits at 2.73 ETH being burned per minute over the past hour. Since the hard fork went live, over 17,000 coins have been burned so far. This means that over $52 million worth of ETH has been burned out of existence. This number will only continue to grow with each passing minute.
The ETH burned would have been released into circulating, putting even more supply in the market, which would lead to less value for the coin. But since this amount is taken out of the equation, it slows down the supply of ETH into the market.
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Speculations remain that the rate at which ETH is burned will probably be fast enough for the supply to slow down, giving demand for the asset to rise higher than supply. This, in turn, would make the digital asset more valuable.
ETH Price Looks Upward
ETH price continues to show indications that the price will keep going up. A good indication is a dip that pushed the price back down below $3K, which was then followed by a prompt correction back up above $3K.
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This indicates that the bulls still continue to have a chokehold on the price of Ethereum. As long as ETH maintains its current trajectory, then the digital asset will be set on breaking its all-time high of $4K.
Setting a new all-time high will see an influx of investors flooding back into the market. The trajectory from there would remain to see when the market moves into the extreme greed territory. But for now, the price of Ethereum has continued to hold through.
ETH price continues to surge upward | Source: ETHUSD on TradingView.com
At the time of this writing, ETH is currently trading $3,111, while the price of bitcoin continues to maintain momentum above $45,000.
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