© Reuters $13 million worth of Ethereum (ETH) destroyed as supply turns deflationary again
U.Today – Recent data from the Ethereum network indicates that Ethereum supply has once again entered a deflationary phase. In the last 30 days, a staggering $13 million worth of Ethereum (ETH) has been destroyed, with the net supply change showing a decrease of 5,619.39 ETH. This deflationary pressure is due to the network's burning mechanism, which has incinerated 74,933.24 ETH, exceeding the 69,313.86 ETH issued in the same period.
The implications of this deflationary trend could indicate an imminent rally for Ethereum. A deflationary supply inherently suggests that the available amount of ETH is decreasing, which could lead to an increase in value per token, assuming demand stays the same or grows. This dynamic, combined with the continued development and adoption of the Ethereum network, may set the stage for a bullish scenario.
Chart by TradingView When analyzing the Ethereum chart, a crucial factor is the possible advance of the 50-day exponential moving average. Ethereum currently sits just below this significant level, and a break above could confirm a change in market sentiment, which could trigger an upward price move.
However, it is essential to recognize that the current Ethereum market traction is relatively weak. Despite the depletion and deflationary state of supply, the lack of significant network activity or innovative upgrades has prevented the token from gaining substantial momentum. Even the activities of Ethereum co-founder Vitalik Buterin, which have historically influenced the market, appear to provide, at best, only a moderate boost, under current conditions.
The market is waiting for a catalyst that can reignite Ethereum's dominance in the blockchain space. While reduced supply is a positive sign, without a concomitant increase in demand or network utility, the impact on price may be limited.
This article was originally published on U.Today.
