Ethereum has moved forward as the London hard fork works smoothly. After the hard fork and the implementation of EIP-1559, the price of ETH has risen continuously as interest in the Ethereum network grows. The price broke $ 3,000 for the first time in over a month over the weekend when Bitcoin price surged above $ 44,000. The ETH price promptly followed the price rally.
Although the price of ETH fluctuated afterwards and fell back below $ 3,000, the price has since bounced back above $ 3,000. This shows the incredible holding power that is represented at this current price level. The hold on hold continues to grow across the market.
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Investors remain optimistic about the introduction of ETH 2.0, which will be launched in 2022. Switching the network to a mechanism that reduces the asset’s energy consumption by 99.5% is a catalyst for a price increase. This would have solved a pain point for investors and miners alike in the market.
The Ethereum price rally correlates with a price rally that is currently being experienced across the market. Coins are seeing huge gains as the weekend closes to usher in the new week.
Ethereum is going deflationary
The proper introduction of the EIP-1559 gives the asset the opportunity to become deflationary over time. ETH coins are burned instead of put into circulation, which effectively reduces the speed at which new ETH coins are brought to market. The London Hard Fork changes Ethereum’s monetary policy. Transaction fees are no longer sent to miners. But now they are burned instead.
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The burn rate for Ethereum is currently 2.73 ETH burned per minute in the last 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. That number will only keep growing with every passing minute.
The burned ETH would have been put into circulation and put even more supply on the market, resulting in lower value for the coin. However, since this amount is removed from the equation, it slows the supply of ETH into the market.
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Speculation remains that the rate at which ETH is being burned will likely be fast enough to slow supply, causing demand for the asset to grow higher than supply. This in turn would make the digital asset more valuable.
ETH price looks up
The ETH price continues to show signs that the price will continue to rise. A good indication is a dip that pushed the price back below $ 3,000, followed by a prompt correction back above $ 3,000.
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This suggests that the bulls are still in a stranglehold on the price of Ethereum. As long as ETH stays on its current course, the digital asset will hit its all-time high of $ 4,000.
Setting a new all-time high will send an influx of investors back into the market. Developments from there would remain to be seen as the market moves into the realm of extreme greed. But for the time being, the price of Ethereum has held up.
ETH price continues to rise | Source: ETHUSD on TradingView.com
At the time of this writing, ETH is currently trading at $ 3,111 while Bitcoin price is still above $ 45,000.
Featured image from Dribbble, chart from TradingView.com