Crypto Industry News:
The theoretical deflation properties of the Ethereum update in London last week were already visible in action on the blockchain, with nearly 800 "deflation blocks" produced.
The jump in the rate of burning of the Ethereum transaction fee caused the supply to turn into deflation for at least two hours. Over the past few days, the network has come under heavy load, which has resulted in the combustion of much more gas.
Burn Bot recorded a case of burning 545 ETH in one hour. With Ethereum emissions reported at 532 ETH per hour, it caused asset deflation by minus 13 ETH in this short period.
When the amount of ETH burned is greater than the mining reward, deflation blocks are produced and the supply temporarily drops. This was seen on the tracker by Carbono, which now reports that there have been 791 deflation blocks so far, defining them as blocks where the burnt fee has exceeded the extracted ETH.
When the London hard fork was implemented, it introduced the highly anticipated Ethereum Improvement Proposal (EIP) 1559 update that adjusted the transaction fee calculation system. Part of this adjustment has been introduced by a mechanism that incinerates part of the base charges levied.
The Ethereum economy is not expected to see sustained deflation until the burning of fees is combined with a reduction in block reward emissions.
However, this news is not good for Ethereum users as gas prices have risen again. According to BitInfoCharts, the average transaction price rose to $ 20 from a low of around $ 4 at the end of July. Etherscan is reporting a whopping $ 28.60 to exchange tokens for Uniswap.
Technical Market Outlook:
The ETH/USD pair has made a new higher high at the level of $3,274 (at the time of writing the article), but the move up is overstretched and the market conditions are extremely overbought. The next target for bulls is seen at the level of $3,498 and $3,552, but traders should expect some kind of pull-back first. The immediate technical support is seen at the level of $3,122 and $3,000. Strong and positive momentum supports the short-term bullish outlook for ETH, but it looks like the market should do the correction first.
Weekly Pivot Points:
WR3 - $4,076
WR2 - $3,643
WR1 - $3,334
Weekly Pivot - $2,889
WS1 - $2,597
WS2 - $2,147
WS3 - $1,835
Trading Outlook:
Ethereum have started the next wave up and violated the long-term target at the level of $3,000. The next long-term target for ETH is seen at the level of $4,394. Nevertheless, in order to continue the long-term up trend, the price can not break below the technical support at the level of $2,695. The level of $1,728 (61% Fibonacci retracement of the last big impulsive wave up) is still the key long-term technical support for bulls.
