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Ethereum’s Surge Above $2,700 for the First Time in 2 Months Causes Crowd Euphoria

Ethereum’s uptick above $2,700 not experienced in two months has made the crypto community excited. The second-largest cryptocurrency had, however, retraced to the $2,600 level during intraday trading, according to CoinMarketCap.

On-chain metrics provider Santiment explained:

“Ethereum’s surge above $2,700 for the first time in 2 months has caused some signs of crowd euphoria, according to our data. We’ve seen social volume play a great role in terms of big spikes recently leading to tops, and valleys leading to bottoms.”

Furthermore, this price surge triggered strong momentum in the derivatives market. Data analytic firm IntoTheBlock stated:

“As the price Ethereum crosses the $2,700 mark for the first time since June 7th, the derivatives market is showing strong momentum. Volume up, Open Interest Up, and Price up, we do know what that means right?”

Therefore, this is a bullish sign coupled with a major upgrade in the Ethereum network. The London hard fork is set to go live on August 5. The London Hardfork is expected to give users more power prompted by a proposed base gas fee. Moreover, the model to be introduced will be advantageous to miners.

26% of ETH supply is locked in smart contracts

Documenting Ethereum, a crypto data provider, acknowledged that 26% of Ethereum supply was in smart contracts.

Smart contracts are blockchain-powered and are often in high demand in decentralised finance (DeFi) and non-fungible token (NFT) sectors.

ETH’s social volume climbed to an 11-week high, prompted by a substantial rise in crowd awareness and interest.

According to a recent analysis by IntoTheBlock, Ethereum faces two key levels of on-chain resistance on its path to $3,000 once again, given that 1.19 million addresses bought 2.03 million ETH between the $2,598 and $2,753 levels.

As the London Hardfork is set to go live, whether this will boost a surge to the $3,000 level remains to be seen.

Ethereum Based Tokens Surge Following London Hardfork Launch

The launch of Ethereum’s EIP 1559 upgrade, or the London Hardfork, has stirred a new rally within the tokens built atop the Etherum blockchain. Starting with ETH, the digital currency has been revived in terms of its price action, and it is currently changing hands at $2,772.30, up 3.50% in the past 24 hours.

The London Hardfork has particularly stirred a positive sentiment about the usability of the Ethereum blockchain. Per the changes it heralds, a base fee is now being proposed to network users who previous has to bid in a fierce gas war to get miners to validate their transactions. The older model, which has proven unsustainable, is now being replaced by this new option, a situation that appears to be exciting investors.

Additional, Ethereum is now a deflationary token, thanks to the new upgrade. According to Ether Chain, a total of 4,012 ETH has been burnt thus far, further shrinking the supply of digital currency. Investors realise this positively impacts price in the long run and are stacking up to catch in on the action.

Ethereum-Based Tokens Trailing the Uptrend

Digital currencies built atop the Ethereum blockchain are also currently seeing the light of day. Uniswap (UNI) was up 7.85% to $25.05, according to CoinMarketCap. Aave (AAVE) was trading at $363.54, marked by a 2.05% upsurge in the past 24 hours.

The reality of this uptrend in Ethereum-based tokens is that the ease of use related to gas fees will be remarkably lowered, and the congestion issue will be solved to an extent. While what affects Ethereum affects these protocols, many have managed to chart a unique path for themselves related to price growth. Many maintain similar growth trends, while others have broken from Ethereum’s correlation.

The London Hardfork complements the other fundamental shift in the broader protocol, and all will feel its impact for the time being.

Ethereum is Set to Become Deflationary after the London Hardfork Went Live

Ethereum (ETH) continues to be the talking point in the crypto community after the London Hardfork or EIP 1559 upgrade going live on August 5. As a result, the first-ever deflationary block on the Ethereum network happened.

The Ethereum network is anticipated to gain steam based on this development. ETH is set to become deflationary, given that its value is expected to continue increasing with time on the foundation of slashed supply.

Eradicating inflationary tendencies on the ETH network

With the London Hardfork going live, the ETH network will set a base fee for every transaction carried out, giving all a fair opportunity.

Users who may wish to conduct their transactions faster than the standard provisions of the network can add a tip to validators to fast-track their transactions. Part of this tip is burnt, helping to improve the monetary policy of the Ethereum network as a whole.

Furthermore, this upgrade will eliminate using other digital tokens for payment of fees in the Ethereum Network. Only Ether will be used, thus restoring the unique relevance of the ETH cryptocurrency.

Scarcity will be introduced every time Ether is burnt after being used in transactions. This feature will help in eliminating inflationary tendencies that the network was accustomed to before.

Ethereum shorts worth $211 million liquidated

According to Moskovski CIO, Lex Moskovski:

“ETH bears got burned. $211M of ETH shorts have been liquidated in 24h.”

Furthermore, a recent surge above $2,700 for the first time in 2 months triggered crowd euphoria in the Ethereum ecosystem. Therefore, social volume played a significant role in this spike.

The second-largest cryptocurrency based on market capitalisation was up by 5.51% in the last 24 hours to hit $2,780 during intraday trading, according to CoinMarketCap.

Ethereum is also emerging as one of the sought-after networks in the crypto space because it accounts for nearly half of the trading volume on top exchanges.

With the London Hardfork upgrade already in place, whether this will boost Ethereum’s upward momentum remains to be seen.

Ethereum’s Perpetual Swaps Open Interest Tops $8B for the First Time Since May

Ethereum’s open interest continues to be correlated with its price, as acknowledged by IntoTheBlock.

The data analytic firm explained:

“Ethereum’s perpetual swaps open interest crosses the $8 billion mark for the first time since May 18. Open Interest refers to the dollar amount of contracts outstanding. As the price of ETH has been climbing alongside OI is said to confirm an upward trend.”

Therefore, Ethereum’s price and open interest are strongly correlated based on these statistics.

ETH has been experiencing an uptick in price days after the London Hardfork or EIP 1559 upgrade went live, seeking to make the second-largest cryptocurrency deflationary.

This improvement will see a base fee set for every transaction carried out, giving all a fair opportunity on the ETH network.

Users who may wish to conduct their transactions faster than the standard provisions of the network will be able to add a tip to validators to fast-track their transactions. Part of this tip is burnt, helping to improve the monetary policy of the Ethereum network as a whole.

More than 18,000 ETH already burnt

According to crypto data provider, CoinMetrics:

“Over 18K ETH has already been burned since Ethereum’s London hard fork went live on August 5th, approx. ~32% of the total ETH issued post EIP-1559.”

Furthermore, Ethereum’s trading volume surged past $10 billion from top-tier exchanges in the last 24 hours.

Ethereum (ETH) has experienced a significant adoption rate thanks to booming non-fungible token (NFT) and decentralised finance (DeFi) sectors.

As a result, ETH’s trading volume across different platforms has been on an upward trajectory. For instance, it accounted for nearly half of the trading volume on top exchanges.

Meanwhile, Bloomberg analyst Mike McGlone recently stated that nothing could stop the process of Ethereum flipping Bitcoin.

Burnt Ethereum Edges Closer to a Billion-Dollar Value

After the London Hardfork or EIP 1559 upgrade went live on August 5, the first-ever deflationary block on the Ethereum network occurred because scarcity was introduced every time Ether was burnt after being used in transactions.

Market analyst Lark Davis disclosed that burnt Ethereum was inching closer to the billion-dollar mark. He explained:

“We’re almost at a billion dollars of Ethereum burnt due to EIP 1559. Thus there has been a billion less in sell pressure from miners. The economics of Ethereum is rocket fuel, and it will only intensify when The merge happens, and we switch from mine and dump to stake and save.”

The London Hardfork upgrade set a base fee for every transaction undertaken. Furthermore, it eliminated the use of other digital tokens for the payment of Ethereum fees. Only Eth was utilised, thus restoring the unique relevance of the ETH cryptocurrency.

Short-term ETH holding increases

According to data analytic firm IntoTheBlock:

“The number of ETH holders holding for under 30 days (traders) is at its highest since May with over 3.8m addresses buying in October. This seems to be led by retail as the amount of volume held by traders is “only” 19m ETH as opposed to 26m in May.”

It shows more users have been entering the Ethereum network.

Meanwhile, ETH’s development team continues to innovate and improve, given that Github’s submission rate hit a 4-month high. Github is a web-based platform used for version control.

The total value locked in Ethereum layer two recently surged to $1 billion. Ethereum L2 is a scaling solution created to mitigate congestion on the network. As a result, decentralised applications (dapps) can avoid network congestion by utilising various technologies.

The Ethereum 2.0 deposit contract, which went live in December 2020, is expected to boost scalability by offering a transition to a proof of stake (POS) consensus mechanism from the current proof of work (POW) framework.

Ethereum Leads ahead of Traditional Markets Performance over the Past 30 Days

The London Hardfork or EIP 1559 upgrade that got activated in August seems to have boosted Ethereum’s performance in the last 30 days.

Market analyst under the pseudonym Crypto Gucci explained:

“Ethereum outperformed all traditional markets in the past 30 days. Over 3.6 billion total value locked (TVL) in ETH’s Layer 2. Ethereum is doing 34x the fee revenue of BTC.”

Despite Ethereum experiencing an 8.7 % drop in the last 24 hours to hit $3,142 during intraday trading, according to CoinMarketCap, the second-largest cryptocurrency has been experiencing an uptick in activities.

For instance, the TVL in Ethereum’s layer 2 recently surged to $3.6 billion. This is a scaling solution created to mitigate congestion on the network. As a result, decentralized applications (dapps) can avoid network congestion by utilizing various technologies.

Furthermore, the amount staked in Ethereum 2.0 reached an ATH of 7,689, 506 ETH.

ETH 2.0 deposit contract went live in December 2020 and is expected to boost scalability by offering a transition to a proof of stake (POS) consensus mechanism from the current proof of work (POW) framework.

Ethereum exchange withdrawals slip to a monthly low

According to crypto analytic firm Glassnode, the number of ETH exchange withdrawals hit a 1-month low of 1,257.083.

Meanwhile, market analyst Ali Martinez speculates that Ethereum will surge. He explained:

“Five reasons why Ethereum will skyrocket: 1) 7.70M ETH locked in 2.0 deposit contracts, worth $28B. 2) 303K ETH burned to date, worth $1.10B. 3) Supply on exchanges at a 3-year low of 19.45M ETH. 4) Supply outside exchanges at ATH of 98.30M ETH. 5) Stable price support at $3,500.”

Burnt Ether is now worth a billion-dollar value, given that scarcity was introduced every time ETH was burnt after being used in transactions. The London Hardfork upgrade introduced this feature.

Additionally, it eliminated the use of other digital tokens for the payment of Ethereum fees. Only Eth was utilised, thus restoring the unique relevance of the ETH cryptocurrency.

Burnt Ether Tops $2B as Ethereum 2.0 Deposit Contract Continues to Grow

Ethereum’s market capitalisation recently breached the $500 billion mark as more investors keep a keen eye on this network.

Ethereum’s uptick in activities can be illustrated by the fact that burnt Ether stands at 608,567 ETH worth $2.089 billion since the London Hardfork or EIP 1559 upgrade went live on August 5.

This upgrade prompted the first-ever deflationary block on the Ethereum network because scarcity was introduced every time Ether was burnt after being used in transactions.

This feature helped in eliminating inflationary tendencies that the network was accustomed to before.

The London Hardfork upgrade also eradicated the use of other digital tokens for payment of fees on the Ethereum Network. Only Ether was utilised, thus restoring the unique relevance of the ETH cryptocurrency.

Total Value Locked in Ethereum 2.0 breaks the record

According to crypto analytic firm Glassnode:

“The total value in the ETH 2.0 deposit contract just reached an ATH of 8,000,290 ETH.”

Ethereum 2.0, also known as the Beacon Chain, was launched in December 2020 and was regarded as a game-changer that sought to transit the current proof-of-work (POW) consensus mechanism to a proof-of-stake (POS) framework.

The POS algorithm allows the confirmation of blocks to be more energy-efficient and requires validators to stake Ether instead of solving a cryptographic puzzle.

As a result, it is touted to be more environmentally friendly and cost-effective. ETH 2.0 is also expected to improve scalability through sharding.

Israel intends to launch its CBDC on the Ethereum network

Israel plans to launch its central bank digital currency (CBDC) on the Ethereum network through its central bank, the Bank of Israel.

The trial intends to check the pros and cons of digital currencies, and the nation sees Ethereum as an ideal solution.

CBDCs represent the digital form of a nation’s fiat money. They are managed directly by the country’s central bank and are backed by national credit and government power.

To stabilise currencies liquidity which the seemingly inevitable cashless society in the future, many countries are now launching experiments to test the workings of CBDC.

In September, the Bank for International Settlements (BIS) teamed up with the central banks of South Africa, Malaysia, Singapore, and Australia to kick start a project dubbed Dunbar to test the application of CBDCs in cross border payments.

Ether’s Net Issuance Dropped from Over 4% to 0.21% Last Week

Ethereum (ETH) has enjoyed a rollercoaster ride this quarter by hitting historic highs in its 6-year journey.

The second-largest cryptocurrency based on market capitalization recently reached an all-time high (ATH) of $4,860, thanks to diminishing supply on its network.

Data analytic firm IntoTheBlock explained:

“A potential reason behind ETH rally is its decreasing supply. Since the deployment of EIP-1559, most of the Ether used as transaction fees has been burned or removed from circulation. Ether’s net issuance has dropped from over 4% to an average of just 0.21% this week.”

Ever since the London Hardfork or EIP 1559 upgrade went live on August 5, Ethereum has become deflationary because its value continues to increase with time on the foundation of slashed supply.

This improvement introduced scarcity on the Ethereum network every time Ether is burnt after being utilized in transactions. Therefore, this upgrade was meant to eliminate the inflationary tendencies this network was accustomed to before.

The dividends seem to be paying off because Ether worth more than $3 billion has been burned so far, causing a supply deficit.

The supply squeeze on the Ethereum network has been going through the roof based on a couple of reasons. For instance, more than 8 million ETH is locked in decentralized finance (DeFi), and at least 8.2 million ETH has been staked in Ethereum 2.0 deposit contract.

Ethereum’s address activity surges by 48%

According to on-chain metrics provider Santiment:

“Ethereum’s latest address activity is up about 48% since the number of unique ETH addresses bottomed out in late September.”

This, coupled with the fact that the number of non-zero ETH addresses hit a record high, shows that more participants are joining the Ethereum network.

Burnt Ether Tops 1 Million ETH as Non-Zero Ethereum Addresses Break the Record

Despite Ethereum correcting from an all-time high (ATH) price of $4,860, the second-largest cryptocurrency has been making notable strides in terms of burnt Ether after crossing the 1 million ETH mark.

Some of the top protocols based on burnt Ether include OpenSea, Ethereum transfers, Uniswap V2, and Tether (USDT). OpenSea is a leading NFT marketplace.

Launched in August, the London Hardfork or EIP 1559 introduced a feature where Ether would be burnt every time it is used in transactions. This has been causing a supply deficit, which prompts a price increase whenever demand rises.

Non-zero Ethereum addresses scale the heights

According to crypto analytic firm Glassnode:

“The number of non-zero Ethereum addresses reached an ATH of 68,561,683.”

This could be translated to mean that more participants are joining the ETH network despite the current retracement. For instance, Ethereum was down by 5.86% to hit $4,037 during intraday trading, according to CoinMarketCap.

Is Ethereum’s momentum cooking?

According to crypto analyst Matthew Hyland, Ethereum is forming a massive symmetrical triangle of the 3-day RSI.

The symmetrical triangle is a chart pattern denoted by two converging trend lines that show lower highs and higher lows. It represents a period of consolidation before the price is forced to break out or break down.

On the other hand, market analyst Michael van de Poppe believes that ETH needs to break above $4,500 for a bull run to be resumed.

Meanwhile, the top 10 non-exchange Ethereum addresses have the highest holding ratio. Crypto insight provider Santiment noted:

“Ethereum’s top 10 largest addresses holding ETH off exchanges now hold a cumulative value of 24.87 ETH. Comparatively, the top largest exchange addresses now hold 4.75M ETH. This ratio of 4.69 is the largest all-time high between these whale addresses.”

Massive Outflows and Burnt Ether Stimulate Ethereum Scarcity to Continue

Since the London Hardfork or EIP-1559 upgrade went live in August 2021, the supply of Ethereum continues to be depleted based on the burning mechanism incorporated.

The scarcity on the Ethereum (ETH) network continues going through the roof based on massive outflows from crypto exchanges. Data analytic firm IntoTheBlock confirmed:

“In just 38 days of 2022, here are a few key data points on how the supply available of Ethereum to buy is decreasing. – 453,890 ETH in outflows from exchanges (decreasing the exchange’s reserves). – 470,798 ETH has been burned.”

Source: IntoTheBlock

Scarcity was introduced every time Ether was burnt after being used in transactions. This mechanism triggers the narrative of Ethereum being deflationary because its value is expected to continue increasing with time on the foundation of slashed supply.

On the other hand, massive exchange outflows are bullish because they signify a holding culture, whereby coins are transferred to cold storage and digital wallets, making liquidation difficult.

Non-zero ETH addresses skyrocket

More participants are jumping on the Ethereum bandwagon, given that the number of non-zero addresses reached an all-time high (ATH) of 74,733,015, according to market insight provider Glassnode.

Source: Glassnode

This has contributed to Ethereum trading above the psychological price of $3,000. The second-largest cryptocurrency based on market capitalization was up by 19.45% in the last seven days to hit $3,196 during intraday trading, according to CoinMarketCap.

Meanwhile, the volume of Ethereum’s daily options trades reached historic highs by topping $1.1 billion at the end of January.

Source: Kaiko Derivatives

“Ethereum’s daily options trade volume broke all-time highs above $1.1 billion at the end of January and equalled Bitcoin’s for the first time last week,” according to crypto insight provider unfolded.