Crypto Breaks Out To 3-Month Highs As “Strong HODLers” Step In After ETH Fork

Crypto Breaks Out To 3-Month Highs As “Strong HODLers” Step In After ETH Fork

Since the London Hard Fork, Ethereum has been surging higher, approaching $2900 this morning…

Source: Bloomberg

And at its highest since May…

Source: Bloomberg

Breaking above critical technical levels…

Source: Bloomberg

Notably, the highly-anticipated ‘London’ upgrade arguably moves ETH closer to becoming a deflationary asset.

A key part of the fork was EIP-1559, which ushered in what some have called an “ultra-sound” era for Ethereum by destroying those pesky mining fees altogether…

What is Ultra Sound Money 🦇🔊?

– Minimal viable issuance. A predictable block subsidy to pay block producers and just enough not to “overpay” for security.

– EIP-1559. Burn a portion of the network fee.

It is deflationary when:
-> burnt_network_fee > minimal_viable_issuance

— Patrick McCorry 🦇🔊🌋 (@stonecoldpat0) July 25, 2021

…and one look at the following tracker shows almost 5500 ETH has already been burned since the fork (less supply, prices higher)

Source

Bitcoin is also rallying as On-chain analyst Willy Woo the “strong-handed long term investors are absorbing” the Bitcoin supply below $42,000, which raises the cryptocurrency’s prospects of closing above the level.

Mid-macro view:
90 day moving average of coins moving to Mr Astley about to cross bullish. pic.twitter.com/UTuKu1Iovq

— Willy Woo (@woonomic) August 6, 2021

The London upgrade and the subsequent activation of EIP-1559 is a mile marker of sorts in the transition to Ethereum 2.0, which will move the network from a proof-of-work consensus to a proof-of-stake consensus.

Bitcoin has just spiked above $43k…

Source: Bloomberg

Also BTC’s highest since May…

Source: Bloomberg

And testing critical technical levels…

Source: Bloomberg

As CoinTelegraph reports, Woo also notes “Coins are rapidly disappearing from the available market as strong holders continue to lock them away for long-term investment,” adding that the supply squeeze could send Bitcoin to $55,000.

I’ve not seen a supply shock opportunity like this since Q4 2020 when BTC was priced at $10k only to be repriced at $60k in the months thereafter. Our supply shock is still in play with higher prices expected.”

Tyler Durden
Fri, 08/06/2021 – 12:35

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