1. Shrinking Supply
The ETH supply has shrunk due to the Merge (as expected). The Ethereum annual issuance rate plummeted from 4% to 0%. In addition, burn fees appear to be steadily increasing. 0% inflation combined with burn rates means Ethereum is and looks to remain deflationary. Essentially more ETH is being destroyed then created.
2. ETH Liquidation
Nearly 400M in ETH short positions have been liquidated in the last 24 hours. Essentially everyone betting that the price would continue to fall, bet wrong. As the price went up, the shorts got liquidated fueling the growth in price even more.
A decreasing supply and a continued market demand may result in a lack of tradeable ETH on exchanges and push prices further to the upside as traders pay a premium to enter the market.
3. Good Global News
The UK law makers this week voted to recognize crypto as a regulated finance instrument.
The lower house of the Parliament voted in favor of adding crypto to the scope of activities to be regulated via the proposed Financial Services and Markets Bill — which already seeks to extend payments rules to stable coins.
4. Increase Market Demand
Rent big project and increased holding of the token have kept big sell plays down. In addtion to staking, lots of ETH is being locked up instead of dumped back on to the market.
As of now everything seems to be going to plan so we will be keeping an eye on the price like everyone else while we keep building!
Written by: WarBiscuitNFT or Get the free Newsletter!
