Here's who burned 9,001 ETH in the last 30 days
U.Today – , the world's largest decentralized exchange, is apparently one of Ethereum's top burners, with a staggering 9,001 ETH incinerated from circulating supply in the last 30 days. This activity firmly positions Uniswap as a key player in the Ethereum ecosystem, not only in terms of volume but also in influencing the scarcity of the coin.
The mechanism behind Ethereum burning is a recent update known as EIP-1559, which introduced a transaction fee burn for every operation performed on the network. Uniswap, as a leading DEX, handles massive transaction volume, which naturally leads to a higher ETH burn rate. This burning acts as a deflationary force on Ethereum's supply, theoretically creating a shortage that could bolster the asset's value in the long term.
Chart by TradingViewHowever, the correlation between burn rate and immediate price action is not linear. While Uniswap's significant contribution to the burn rate underlines its dominance, the short-term impact on Ethereum price is moderate. In the longer term, this deflationary mechanism is expected to establish a base of support for the price of ETH, as the reduction in supply, ceteris paribus, should increase the value of each remaining ETH.
However, it is important to note that scarcity alone does not guarantee growth in value. Ethereum's intrinsic value also depends on its utility, adoption, and broader market sentiment. Ethereum is currently facing stiff competition from the growth of the ecosystem, and many traders who favor volatility and risk gravitate towards Solana.
A technical analysis of the current Ethereum price action shows a challenging market phase. Ethereum is trying to hold support around the $2,400 level. If it fails to hold this, the next key support is seen at the $2,300 mark, near the 50-day EMA. A break below this could see Ethereum test the $2,000 psychological support level. Conversely, if Ethereum can overcome 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.
