Ethereum

Solana

when

<figure>
 <figcaption>
 Cover image via <a href="https://u.today/" rel="noopener noreferrer nofollow">U.Today</a>
 </figcaption>
</figure>
The <a href="https://u.today/solana-sol-gains-crucial-foothold-xrps-movements-are-too-predictable-last-resort-for-ethereum-eth" rel="noopener noreferrer nofollow">Ethereum</a> network has recently observed a noteworthy supply drop, entering further into the deflation area. This week's data showcases a supply change with a decrease of 393.60 ETH, leading to a total supply of 120,179,017 ETH. This decline does not immediately impact the asset's price; however, a sustained deflationary trend could signal a positive development for <a href="https://ultrasound.money/" rel="noopener noreferrer nofollow">Ethereum's market performance</a>.
Deflation in a cryptocurrency like <a href="https://u.today/massive-ethereum-whale-shifts-15000-eth-in-staking-move" rel="noopener noreferrer nofollow">Ethereum</a> signifies that the number of coins being burned — taken out of circulation — is exceeding the number being created or issued. Such a supply contraction, especially when continuous, can be beneficial for an asset's valuation, as it may enhance scarcity and potential demand over time. <img alt="https://www.tradingview.com/" data-entity-type="file" data-entity-uuid="c4fc4eff-d260-474c-9f09-ceac648e756b" src="https://u.today/sites/default/files/inline-images/image_453.png">ETH/USD Chart by TradingView 
Analyzing the current Ethereum chart, we observe that ETH has been maintaining a steady posture above the 100-day EMA (orange line), a significant indicator of long-term market sentiment. This positive position, juxtaposed with the recent supply deflation, provides a solid foundation for a potential growth scenario.
The deflationary mechanism introduced by Ethereum's EIP-1559 is expected to play a vital role in the asset's price dynamics in the long-term future. As the network reduces its overall supply, each ETH token's relative value could increase if demand remains constant or grows. We might also consider this as a precursor to a new short-term era for Ethereum, where increased network activity causes severe deflation.
The recent <a href="https://u.today/solana-sol-down-price-reacts-immediately-whats-happening" rel="noopener noreferrer nofollow">outage of the Solana network</a> adds an intriguing layer to the narrative. Historically, when alternative layer-1 networks face technical difficulties, Ethereum often benefits as the leading smart contract platform. The current downtime in the Solana ecosystem may redirect attention and activity back to Ethereum, potentially strengthening&nbsp; ETH's market position.

Ethereum (ETH) Supply Drop Starts: Are We Seeing Beginning of New Ethereum Era?

U_Today

Other articles published on Feb 6, 2024

TUSD Warns Holders to Convert BEP2-TUSD Tokens Before BNB Beacon Chain Decommission

Experts weigh in on XRP; VeChain and Borroe Finance draw investors

Bonk Mulai Ditinggalkan Investor Whale, Retik Finance Jadi Incaran Baru

How Pushd (PUSHD) Unveils the Future: A Comparison to Ethereum Classic (ETC) and Optimism’s (OP) ...

Aeternity Foundation Enhances Blockchain Ecosystem with Strategic Leadership and Partnerships

Retik Finance (RETIK) and Shiba Inu (SHIB) to spearhead the 2024 cryptocurrency bull run

Join our free newsletter for daily crypto updates!