Ethereum

Ethereum Testnet Burns 88K ETH! Will Deflation Trigger a Price Surge

Ethereum’s upcoming London upgrade has been updated on the Ropsten testnet. The upgrade includes the much-anticipated Ethereum Improvement Proposal (EIP) 1559.

Further, the testnets  Goerli – June 30, Rinkeby – July 7 have been slated for the London upgrade. According to the Ethereum Foundation, once these networks have successfully upgraded, a block will be set for the Ethereum mainnet and publicly notified.

Transaction costs will be burned as a result of the new upgrade. According to Watch the Burn, an EIP-1559 tracking website, about 88,500 testnet ETH worth $177.6 million has been burned on Ropsten in the day since London’s deployment.

Ethereum Burn to Cause a Price Surge?

The high rate of ETH burned on Ropsten has sparked debate about whether EIP-1559 will make Ethereum deflationary. and what this means for Ethereum’s price in the future.

According to ConsenSys, an Ethereum software solutions company, the annual supply change will be minus 1.6 million ETH. This translates to the burning of $3.2 billion in ETH at current prices, reducing the annual supply rate by 1.4%.

Ryan Berckmans, Founder of Predictions Global had suggested that Ethereum prices could surge to five figures through these deflationary mechanisms. He opines that this will put ETH in the hands of holders instead of miners. Rightly so as there will be more scarcity through fee burns.

However, hodlers need to wait to witness the surge. Amidst the mad market volatility, it may take a little longer for these shortage and demand features to be reflected in its price movement.

ETH Price Outlook

Ethereum is currently trading at $1944.30 down by 18.3% in last week. The #2 token by market cap is down 54% from its all-time high of $4,350 on May 12. 

To reach the first key resistance level at $2,055, Ethereum would have to dodge the $1,970 pivot. However, the token would need support from the broader market to break out from Thursday’s high of $2,035.90.

ETH Price might test resistance at $2,200 in the case of a strong crypto resurgence. then, $2,121 will be the second significant resistance level.

Support Level: $1,904

Resistance Level: $2,055

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Haripriya Sureban

A writer and a Crypto fanatic exploring the DeFi Space. Staying abreast on all the crypto trends and trivia is my forte. For the rest I nerd out on movies and series.

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