Ethereum has surpassed $3,400, a significant psychological barrier, and the altcoin has one last resistance barrier at the $4,078 level before it rallies to a new all-time high.
Ethereum’s on-chain activity signals that ETH is poised for the second leg of bull run
The spike in non-fungible token activity has led to a rise in the number of active addresses and the transaction volume on the Ethereum network.
NFT sales volume on the largest peer-to-peer marketplace, OpenSea, has surged to $1.9 billion since the beginning of August. Most NFTs are valued in Ethereum, and the spike has triggered an increase in transaction fees on the Ethereum network.
Despite the rise in fees, the implementation of EIP-1559 has led to the burn of 150,000 Ether so far, of which 50,000 was burned in the past five days.
Lucas Outumuro, head of research at blockchain intelligence firm IntoTheBlock, noted that Ethereum’s daily issuance has fallen below Bitcoin’s for the first time.
The current Ethereum on-chain activity is at a similar level seen during the onset of the first leg of the bull run in April 2021.
Since the latest Ethereum Improvement Proposal (EIP-1559) went live in the London Hard Fork, Ethereum’s daily issuance has turned negative on several occasions. Traders are now anticipating the “merge,” which is the change from a Proof-of-work to a Proof-of-stake consensus mechanism.
The “merge” marks a drop in Ethereum supply, equivalent to two Bitcoin halvings. A sudden plunge in supply supports the narrative of a supply shock and a “Triple Halving” event.
Since EIP-1559 went live, Ethereum is being pulled out of circulation through burning. The overall impact of the protocol can be considered equivalent to a single Bitcoin halving. Traders are, therefore, expecting Ethereum 2.0 to compete with Bitcoin for cryptocurrency market share and replace it.
Bitcoin has enjoyed dominance and gained popularity through its first-mover advantage since its launch. However, analysts expect Ethereum’s rising relevance, demand and “supply shock” to push Ether to flip BTC.
A key indicator, the Global In/Out of the Money (GIOM) graph, classifies addresses based on whether they are profiting, breaking even or losing money at the current price level. GIOM is useful in predicting support and resistance levels for crypto assets.
Ethereum surpassed the $3,400 barrier, a psychologically important one, and the indicator reveals that there is little resistance in the path to a new all-time high. The last level of on-chain resistance is at $4,078, where over 1.5 million addresses purchased Ether.