📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Here's Who Burned 9,001 ETH in Last 30 Days

Published 02/04/2024, 01:58 PM
Updated 02/04/2024, 04:00 PM
Here's Who Burned 9,001 ETH in Last 30 Days

U.Today - Uniswap, the world’s largest decentralized exchange, is apparently a top burner of Ethereum, with a staggering 9,001 ETH incinerated from the circulating supply in the last 30 days. This activity firmly positions Uniswap as a key player in the Ethereum ecosystem, not just in terms of volume but also in influencing the coin's scarcity.

The mechanism behind Ethereum's burn is a recent upgrade known as EIP-1559, which introduced a transaction fee burn for every operation made on the network. Uniswap, as the leading DEX, handles a massive volume of transactions, naturally leading to a higher rate of ETH being burned. This burn acts as a deflationary force on the supply of Ethereum, theoretically creating scarcity that could bolster the asset's value over the long term.

ETH/USD Chart by TradingViewHowever, the correlation between burn rate and immediate price action is not linear. While Uniswap's significant contribution to the burn rate underscores its dominance, the short-term impact on Ethereum’s price is subdued. Over a longer horizon, this deflationary mechanism is expected to establish a supportive base for the price of ETH, as reducing supply, ceteris paribus, should increase the value of each remaining ETH.

It is important to note, though, that scarcity alone does not guarantee value growth. The intrinsic value of Ethereum also hinges on its utility, adoption and broader market sentiment. Currently, Ethereum is facing stiff competition from Solana in ecosystem growth, with many traders who favor volatility and risk gravitating toward Solana.

A technical analysis of Ethereum's current price action shows a challenging market phase. Ethereum is attempting to hold support around the $2,400 level. Should it fail to sustain this, the next key support is observed at the $2,300 mark, near the 50-day EMA. A breach below this could see Ethereum test the $2,000 psychological support level. Conversely, if Ethereum can rally past the immediate resistance at $2,500, it could pave the way to retest previous highs near $2,800.

This article was originally published on U.Today

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.