Ethereum price eyes 35% rally after 6,000 ETH gets burned in one week
Ethereum’s native token, Ether (ETH), looks ready to undergo a massive rally due to a mix of technical and fundamental factors.
From a technical perspective, ETH’s price now eyes a 35% rebound by the end of October after holding testing a key support level. This level is a rising trendline that has capped Ether’s downside attempts since June 2022, as shown below.
In other words, traders have shown interest in buying Ethereum tokens near this level in recent weeks. Meanwhile, the accumulation sentiment has prompted the price to rise toward another significant level — a horizontal trendline resistance near $1,800, about 35% above the current price.
The bullish technical outlook for Ether takes further take cues from its depleting supply in recent days.
Ether supply has dropped by nearly 6,000 ETH, or around $7.9 million, since Oct. 8. That marks the Ethereum network’s first deflationary move — where more ETH is being destroyed than created — since its switch from proof-of-work (PoW) to proof-of-stake (PoS) via the Merge one month ago.
Users must pay so-called gas fees to validators to confirm their on-chain Ethereum transactions. Historically, more Ethereum network traffic resulted in higher gas fees and more revenue for validators.
But after the August 2021 EIP-1559 update, a portion of the gas fee is permanently removed from Ether circulation. Simply put, more ETH gets burned in a high-demand environment.
The same started happening after Oct. 8, with evidence showing that a new crypto project named XEN Crypto is increasing network traffic. In the last seven days, XEN Crypto has contributed to the burning of 4,490 ETH tokens against 16,690.52 ETH tokens.
XEN Crypto started over the weekend with no supply.
Still, it was free
Read more on cointelegraph.com
