ETH’s Uptrend Remains Healthy as the Circulating Supply Continues to Plunge
The entire cryptocurrency market is gradually recovering amid the recent flash crash. There were speculations that the crash was the beginning of the downtrend, but the sellers failing to hold the resistance levels to an extent proves that the market is simply under a deep retracement.
The high volatility in the crypto market persists despite its existence for over a decade. And the markets dipping over 5% on average is being normalized.
While few altcoins are outperforming and leading the market, Bitcoin and Ethereum are slowly inching their way up. After finding support at major demand levels, these top two cryptos began to head higher. Of course, the bulls’ momentum lacks, the prices have managed to reach significantly higher levels, breaching through resistances.
On the price front, Bitcoin has been hovering around $48,000 after considerably consolidating between $44,000 and $47,000. Ethereum, on the other hand, is attempting to trade at $3,600 after breaking through its nearest resistance at $3,500. And both cryptos are about 9% lower from their recent highs.
Senator Warren Concerned over Ethereum Network’s High Fees
Senator Warren, an intellectual critic of the cryptocurrency market, has recently raised her worry about the high transaction fee on the Ethereum network. The concerns were raised during a committee meeting held on Tuesday that discussed banking, housing, and urban affairs with Gary Gensler, the Securities and Exchange Commission chair.
The senator outspoke on the matter of high fees, stating that the unpredictable high fees on the Ethereum network can make it dangerous for the crypto traders who are not wealthy enough to digest the transaction costs.
Illustrating the recent flash dip in the crypto market, she pointed out that the fee for token swaps exceeds a whopping $500. And these numbers would certainly be problematic for smaller investors.
ETH Circulation Supply Observes Massive Decline
The circulating supply of Ethereum is depleting at an unanticipated pace. As ETH 2.0 went live last year, the ETH locked to date stands at 7.7 million with over 46,800 unique deposit contracts. Considering the current market price of Ethereum, the locked ETH is equivalent to about $28 billion.
The London hard fork that took place on August 05 has led to the supply to plunge significantly. As of writing, more than 303,000 ETH has been destroyed and taken out of circulation.
Furthermore, trading platforms also observe a significant fall in the number of ETH available, hitting a 3-year low of 19.45 million ETH. Concerning the tokens being removed from the circulating supply puts the price of ETH for a positive future, as a decrease in supply and stagnant or rising demand drives the prices higher.
Vitalik Buterin Makes it to the Top 100 in Time Magazine
Vitalik Buterin, the co-founder of Ethereum, appeared as one among the “100 Most Influential People List” of 2021 for being a top innovator in the world.
Speaking about Buterin, he was recently seen admitting that NFTs are perhaps the most astonishing use case relative to others such as Decentralized Finance (DeFi), identity management, and gaming.
As a matter of fact, OpenSea, currently the leading NFT marketplace, has observed more than $3.4 billion inflows from transactions – clearly showing the demand growing for non-fungible tokens. And according to stats from Dune Analytics, OpenSea has grossed approximately $1.7 billion in sales since the beginning of September.
Bullishness in Ethereum Revives
The price action of Ethereum has been rather interesting, as the prices have been on a roller-coaster ride since August. As the market entered into August, the transition came to an end, and the prices began to rise. But the market found resistance at roughly $3,200, much earlier than expected.
The retracement turned to be in the form of a channel, where the price was gradually inching higher and higher. But the resistance at $3,330 put the market into a range, as the buyers could not make higher highs. During the sideways sequence, the market left higher lows instead, showing the presence and increased interest of the buyers. As a result, the market pumped, which took the price of ETH all the way to $4000 within a week.
As anticipated, the profit-taking came in at the highs. But surprisingly, the prices plunged in a flash, from the same high, and erased all the recent gains. Despite the hard drop, the demand zone held firm, as the buyers bought the discount immediately, taking the price up to $3,500.
Currently, after the consolidation at the resistance turned support, the price has attempted to breach the recent supply area at $3,500. Given the descent momentum of the bulls on their way up and Bitcoin supporting it with similar price action, it is possible that ETH will reach back to the $4,000 high in the short term.
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