Ethereum is all set to transition from its previous, energy-intensive proof-of-work to a more scalable and cheaper proof-of-stake. In December 2020, the project’s initial phase, dubbed Phase 0 or Beacon Chain, began. It gave the Ethereum blockchain a sharded network design.
EIP-1559, AKA the London hard fork, is the next step in bringing Ethereum closer to proof-of-stake. It aspires to solve the problem of rising gas and transaction fees on the blockchain. By burning the base network fee, it also intends to make ETH a deflationary token.
Analysts and traders believe the Ethereum market has a lot of upward potential due to looming shortages the upgrade is set to bring. Ether’s shrinking supply and rising demand will increase its value.
Furthermore, CryptoQuant, a crypto analytics firm based in South Korea, revealed an increase in Ether traders’ holding behavior, based on their dropping ETH balances across all cryptocurrency exchanges.
The reduction of Ether on exchanges is certainly a favorable indication, according to Yuriy Mazur, head of the data analysis department at CEX.IO Broker. He says Investors are now looking for other ways to protect their ETH holdings amid the price drop rather than selling them directly for cash.
Ethereum (ETH) Price could surge 40% against Bitcoin
The price of ETH/BTC has risen by 21.28% since its low of 0.0552 sats on June 27. In recent days, it appeared that more traders decided to sell their Bitcoin holdings in order to pursue chances in the Ethereum market. On a YTD basis, ETH has already outperformed Bitcoin by more than 160%.
Popular analyst and trader Micheal Van De Poppe has made bullish predictions for ETH ahead of the upgrade. He says, that the ETH/BTC exchange rate would climb from its current 0.05-0.06 sats range to as high as 0.07 sats soon.
His bullish parallel was based on the pair’s 0.063 sats support level. During the catastrophic crypto market crisis in mid-May 2021, the price floor was critical in sustaining ETH/positive BTC’s bias. During the pair’s advance in the early May 2020 trading session, it also provided sturdy support.