Taking to X on November 15, @sassal0x, a vocal Ethereum supporter claiming to be an independent educator and angel investor, is confident about ETH’s prospects, citing solid fundamentals. In the researcher’s assessment, these factors make the coin a superior option for long-term value accrual than all other crypto assets, including Bitcoin (BTC) and decentralized finance (DeFi) projects like Uniswap and Aave.
Ethereum Bulls Capped Below $2,100
Ethereum is the second most valuable cryptocurrency by market cap at spot rates. Changing hands above the psychological $2,000 level, ETH is in an uptrend, more than doubling from 2022 lows when prices tanked as market sentiment took a turn for the worse following the collapse of FTX, the defunct crypto exchange.
Whether this uptrend will remain as we advance is unclear. As it is, the immediate support level stands at $2,000. Meanwhile, prices are trending inside the bullish bar of November 9. This bullish, engulfing bull bar with a relatively high trading volume anchors the current trend. Nonetheless, for uptrend continuation, there must be a solid close above $2,100 and November 2023 highs for @sassal0x’s outlook to be valid.
Is ETH Ultra Sound Money Yet?
Despite confidence in crypto and Ethereum communities, ETH bulls have failed to breach this resistance level. Still, experts are upbeat, expecting ETH to float higher as sentiment improves. Part of these tailwinds will be due to what Ethereum supporters claim to be ETH’s gradual evolution to become “ultrasound money.”
Whether ETH, as of November 15, has reached “ultrasound money” status remains a matter of debate. However, theoretically, once Ethereum’s burning rate is higher than inflation, the coin will be deflationary. As more users demand ETH to pay gas fees when transferring assets or deploying smart contracts, Ethereum will be burning more coins, making it “scarce money,” which is more desirable.
Ethereum implemented EIP-1559 on August 5, 2021, as part of the London hard fork, introducing a burning mechanism that destroys part of gas fees, effectively taking more ETH out of the circulating supply. So far, according to UltraSound Money, over 3 million ETH has been burned since the activation of EIP-1559.
While billions of ETH continue to be removed from circulation, it has not been enough to make the coin ultrasound because annual inflation is higher than the burn rate.
ETH burning might be accelerated as the market recovers, driving interest in the DeFi and non-fungible token (NFT) sectors. Due to the extended bear market, DeFi activity shrunk as total value locked (TVL), mainly in Ethereum, fell to as low as $20.5 billion in 2023.
Feature image from Canva, chart from TradingView