Ether Prints Record Winning Streak as London Hard Fork Looms

Ether Prints Record Winning Streak as London Hard Fork Looms

Ether looks to extend its record daily winning streak in the runup to a planned upgrade on Ethereum’s blockchain that could significantly reduce the cryptocurrency’s supply growth.

The second-largest cryptocurrency by market cap was trading 1.6% higher on the day near $2,600 at press time, having rallied 43% over an unbroken string of 12 straight daily price gains, according to Coinbase data.

“Ether has notched a 12-day winning streak, the longest ever,” blockchain analytics firm IntoTheBlock tweeted early today, citing $2,598 and $2,753 as key resistance levels on the path toward $3,000.

ETH daily chart Source: TradingView

Aside from bitcoin’s price recovery from $30,000, ether may have received a boost from Ethereum’s upcoming 11th backward-incompatible upgrade, or hard fork, slated to happen on Aug. 4.

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The so-called London hard fork contains four Ethereum Improvement Proposals (EIP), of which EIP-1559 will activate a mechanism that would burn a portion of fees paid to miners. Once it takes effect, increased network usage will result in a higher amount of ETH being burned, thereby curbing the cryptocurrency’s supply growth over time.

The upgrade may bring ether a store-of-value or deflationary-asset appeal in the eyes of some investors – a narrative so far largely focused on bitcoin. The top cryptocurrency’s supply is capped at 21 million, and its per-block issuance is reduced by 50% every four years.

Under simulations run by Dune Analytics, the upgrade would have burned more than 2.9 million coins in 365 days if implemented a year ago, amounting to over 70% net reduction in supply growth.

“The highly anticipated Ethereum London hard fork event will expose users to a more flexible and cheaper fee structure and introduce a mild burn effect, billed to make ether deflationary,” Greg Waisman, co-founder and COO at the global payment network Mercuryo, said. “The coin has trailed an uptrend from the weekend, and we may see this brewing positive sentiment over the coin shoot its price to $3,000 in the coming days/weeks following the update.”

Options data shows investors are positioning for continued gains. Both long-term and short-term put-call skews are flashing negative values for the first time in nearly three months. That’s a sign of greater demand for calls or bullish bets relative to puts.

One-week, one-, three- and six-month put-call skews hover below zero, an across-the-board bullish market positioning last observed in early May.

Crypto Market Dips 1.7%, Ethereum Prepares for London Hard Fork

BTC declines 3 per cent; most major cryptocurrencies flash red

Crypto Market Dips 1.7%, Ethereum Prepares for London Hard Fork

The global cryptocurrency market stood at $1.57 trillion, registering a 1.7 per cent decline in the 24-hour period ending 9 am IST. Trade volumes backtracked by 8 per cent across exchanges as investors wait for Bitcoin (BTC) to regain momentum towards $42,000.

BTC continued its correction for the third consecutive day, declining 3 per cent in the last 24 hours to close at $38,600. BTC support levels are currently at $38,500 and $36,500. $41,000 is the next major resistance level. During the recent relief rally by BTC, data analytics firm Glassnode reported a 30 per cent surge in the number of active BTC addresses. This period also witnessed an accumulation by whales (investors with large amounts of a cryptocurrency) with 9.2 million BTC stored in among addresses with minimum 100 BTC.

Ethereum (ETH), the world’s second-largest cryptocurrency by market cap, has seen an impressive rally for 13 consecutive days. This extended rally comes in anticipation of the London hard fork, slated to go live tomorrow. ETH is currently trading at $2,535 with a marginal 1 per cent dip today.

Amongst the top 20 cryptocurrencies, Chainlink (LINK) and Bitcoin Cash (BCH) registered moderate gains, while the rest flashed red at day’s close. BTC continues to dominate the market share at 46.1 per cent.

Despite losing momentum in the past few days, BTC traders are optimistic, terming this downtrend as a healthy correction as on-chain metrics signaled an accumulation phase. If BTC is able to bounce back and break the resistance zone between $40,600 and $41,000, then it is likely to see a rally towards $46,000.

Top Gainers today:

Voyager Token (VGX): 23.9% Stacks (STX): 18.8% THORChain (RUNE): 17.6%

Top Losers today:

Quant (QNT): -11.4% Decred (DCR): -10.9% Siacoin (SC): -5.4%

The analysis includes the top 100 coins only as of 9 am IST.

Source: CoinMarketCap

Crypto News at a Glance:

US mining company Marathon Digital has purchased more than 30,000 Bitcoin miners at a cost of $120.7 million in a move to capitalize on China’s mining crackdown. Marathon Digital will likely control 12 per cent of BTC mining hash rate after this addition. According to a local news agency, South Korea is reportedly planning to shut down at least 11 mid-sized cryptocurrency exchanges due to their alleged illegal activities. NCR Corporation, a Fortune 500 company, has announced its plans to acquire LibertyX, a retailer and Bitcoin ATM operator with over 9,000 kiosks in the US. Mobile payments platform Square has generated a gross profit of $1.14 billion according to its Q2 2021 earnings report. Bitcoin-related services drove $55 million in gross profit aided by the increase in the price of Bitcoin and growth in customer demand.

DISCLAIMER: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.

The ethereum upgrade which will destroy coins is happening August 5. Here are 4 things you need to know.

Dado Ruvic/Reuters

A major ethereum network upgrade is due on Thursday, codenamed EIP-1559.

The change has excited some investors as it will start to destroy or “burn” ether coins.

Insider breaks down four things you need to know about the upgrade.

Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

A hotly anticipated upgrade is coming to the ethereum network on Thursday, which will change the way transaction fees work and start to destroy coins. It had been scheduled for August 4, but was delayed slightly.

The change is technically known as Ethereum Improvement Protocol 1559, or EIP-1559, and will be included in a network upgrade called the “London hard fork.”

Here are four key things you need to know.

EIP-1559 aims to make transaction fees more predictable

The change to ethereum is all about making transaction fees more predictable, and therefore making the network easier to use.

Fees are currently highly volatile, in large part because the network uses an auction system. Users bid against each other to have their transactions processed and verified by other users called miners.

Transaction fees can soar when the network’s busy. But the main problem, as developers see it, is that the blind auction system makes fees highly volatile and unpredictable.

After EIP-1559, users will pay a “base fee” which will be algorithmically determined by the network, depending on how busy it is, instead of submitting bids. They will also be able to pay a miner a “tip” to have their transaction processed sooner.

The idea is that the network’s base fee will always be clear to users as they go into transactions, and won’t jump around from one minute to the next. If it’s too high, users can wait until it’s lower.

Read more: The head of research at a crypto firm who called bitcoin’s surge to $60,000 last year breaks down why it will reach $250,000 by 2025 - and shares 2 altcoins that could go up 20 times

It will destroy coins - and may boost ether

EIP-1559 has excited people because it will destroy or “burn” ether - the cryptocurrency of the network.

Miners do not receive the base fee, otherwise they could artificially congest the network to keep the fee high. It’s destroyed instead.

Some investors believe the fact that the supply of ether will be limited by burning could cause explosive price growth.

However, the impact on price is far from certain, developers say. It also depends on things like transaction volumes, which determine how big gas fees are and so how much ether is destroyed.

“Until it’s deployed, we don’t know exactly what the effect will be in terms of ether burned,” Ben Edgington, ethereum developer at ConsenSys, said.

Transaction fees won’t necessarily be cheaper

Transaction fees on the ethereum network may fall, because a more predictable base fee is likely to help users overpay less often than under the highest-bidder-wins system.

But EIP-1559 does not aim to reduce transaction fees - only to make them more predictable. The base fee itself will vary, going up when the network is busier and down when things are calmer.

Bigger changes are coming to the ethereum network

EIP-1559 is small fry compared to ethereum 2.0 - an overhaul of the network’s entire infrastructure which developers hope will be complete by early 2022.

Ethereum 2.0 will see the network change from a “proof-of-work” system to a “proof-of-stake” system. Under PoW, miners use vast amounts of computing power to verify transactions. But under PoS, users will put forward ether to gain the right to verify transactions and earn coins.

Developers are also working on scaling up the ethereum network by adding more side networks and linking them together. Ethereum insiders hope this will reduce congestion and transaction costs.