HomeCryptocurrency$13 million worth of Ethereum (ETH) burnt, reducing supply and making it...

$13 million worth of Ethereum (ETH) burnt, reducing supply and making it deflationary once more.

The Deflationary Trend in Ethereum Supply Sparks Optimism

Ethereum Supply Enters Deflationary Phase

Recent data from the Ethereum network reveals that the supply of Ethereum has once again entered a deflationary phase. Over the past 30 days, approximately $13 million worth of Ethereum (ETH) has been destroyed, resulting in a net supply change showing a decrease of 5,619.39 ETH. This deflationary pressure is attributed to the network’s burning mechanism, which has incinerated 74,933.24 ETH, surpassing the 69,313.86 ETH issued during the same period.

Potential Implications for Ethereum

This deflationary trend could potentially signal an impending rally for Ethereum. A deflationary supply inherently suggests that the available quantity of ETH is decreasing, which could lead to an increase in the value per token, assuming demand remains constant or grows. This dynamic, combined with the Ethereum network’s ongoing development and adoption, may set the stage for a bullish scenario.

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Technical Analysis and Market Sentiment

Examining the Ethereum chart, a crucial factor to consider is the potential breakthrough of the 50-day Exponential Moving Average. Currently, Ethereum is hovering just below this significant level, and a break above could confirm a shift in market sentiment, potentially igniting upward price movement.

Market Traction and Network Activity

However, it is essential to acknowledge that Ethereum’s current market traction is relatively subdued. Despite the burn and the deflationary state of supply, the lack of significant network activity or groundbreaking updates has prevented the token from gaining substantial momentum. Even activities by Ethereum’s co-founder, Vitalik Buterin, which historically influenced the market, seem to provide only a moderate push at best, under current conditions.

Looking Ahead

The market eagerly awaits a catalyst that could reignite Ethereum’s dominance in the blockchain space. While the reduction in supply is a positive sign, without an accompanying increase in demand or network utility, the impact on price may be limited.

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This article was originally published on U.Today

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