Ethereum Price Eyes 35% Rally After 6,000 ETH Burned in One Week

A new crypto project to make tokens by burning Ether is driving Ethereum's deflationary turn.

Market analysis

Ethereum's native token, Ether (ETH), looks poised for a massive rally due to a mix of technical and fundamental factors.

From a technical standpoint, ETH price is now eyeing a 35% rebound by the end of October after testing a key support level. This level is an upward trendline that has capped Ether's downside attempts since June 2022, as shown below.

ETH/USD weekly price chart. Source: TradingView

In other words, traders have shown interest in buying Ethereum tokens near this level for the past few weeks. Meanwhile, the sentiment of accumulation prompted the price to rise towards another significant level: a horizontal trendline resistance near $1,800, about 35% above the current price.

Ether Supply Drops 6K ETH

Ether's bullish technical outlook is further inspired by the depletion of its supply in recent days.

Ether supply has fallen by nearly 6,000 ETH, or about $7.9 million, since Oct. 8. This marks the first deflationary move for the Ethereum network – where more ETH is being destroyed than created – since its move from proof-of-work (PoW) to proof-of-stake (PoS) via merger a month ago.

Ethereum supply since the merger. Source: Ultrasound.Money

Users have to pay so-called gas fees to validators to confirm their on-chain Ethereum transactions. Historically, more...