Published Feb 03, 2024 08:28AM ET Updated Feb 03, 2024 09:01AM ET
© Reuters $13 Milion in Ethereum (ETH) Destroyed as Supply Becomes Deflationary Again
U.Today – The recent data from Ethereum network indicates that the supply of Ethereum has once again entered a deflationary phase. Over the past 30 days, a striking $13 million worth of Ethereum (ETH) has been destroyed, with the net supply change showing a decrease of 5,619.39 ETH. This deflationary pressure is due to the network’s burning mechanism, which has incinerated 74,933.24 ETH, outstripping the 69,313.86 ETH issued in the same period.
The implications of this deflationary trend could signal an approaching rally for Ethereum. A deflationary supply inherently suggests that the available quantity of ETH is decreasing, which could lead to an increase in value per token, assuming demand stays the same or grows. This dynamic, combined with the Ethereum network’s continuous development and adoption, may set the stage for a bullish scenario.
Chart by TradingViewAnalyzing the Ethereum chart, a crucial factor is the potential breakthrough of the 50-day Exponential Moving Average. Currently, Ethereum hovers just below this significant level, and a break above could confirm a shift in market sentiment, potentially igniting upward price movement.
However, it is essential to acknowledge that Ethereum’s current market traction is relatively muted. Despite the burn and the deflationary state of supply, the lack of significant network activity or groundbreaking updates has kept the token from gaining substantial momentum. Even activities by Ethereum’s cofounder, Vitalik Buterin, which have historically influenced the market, seem to provide only a moderate push at best, under current conditions.
The market 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.
This article was originally published on U.Today