The second most popular cryptocurrency Ethereum, which will leave behind a rather big milestone in the coming period. How this can affect the market, we will consider in this article.
Ethereum Is Approaching Another Milestone
One of the main factors fueling Ethereum’s bull run, ETHit is the incineration mechanism that removes a large part of the from circulation and contributes to the deflationary transformation of the asset. For the time being EIP-1559 thanks to the mechanism presented in its update, more than 930,000 coins were burned and buried in history.
With the increasing use of the network, investors will soon have a total of one million units ETH he’s getting ready to testify to his cremation. The current burning rate was recorded as approximately 12,000 coins per day. At the same speed, the network will burn the millionth coin in the next 4 or 5 days. Due to the strong market correction, Ethereum retreated by 10%, which led to a decrease in the value of the burned coins.
How Does the Incineration Mechanism Affect the Market?
With high burning rate Ethereum as a result of the inability to establish a balance between supply and dec, a state of supply shock can be entered with a rapid change in the price of the asset. This situation is getting closer to the fire due to the rapidly growing stock market outflows, which indicate that investors are not willing to sell what they have and prefer to keep their funds.
Many cryptocurrency analysts note that long-term investors expect to see Ethereum reach the status of a deflationary asset, which means that it will face the situation where more coins are burned than exported.
Besides that Ethereum, following the general market trend, fell to $ 4,000 levels. Ethereum, which is located above the dangerous zone, has not yet been able to literally set a certain direction. The Ethereum price is trading at the 4.200 dollar levels as of the time of writing of this article.