Crypto enthusiasts hype up over Ethereum's Pectra Upgrade: Here's the lowdown
Enhancement of Pectra Triggers Increased Activity on Ethereum Network, Nudging Ether (ETH) Towards $2,000 Mark
Ethereum's awaited Pectra Upgrade lit the crypto world on fire yesterday, causing a whirlwind of excitement across the community. This network overhaul has already begun reshaping the network's supply dynamics, and the coin's circulating supply reached an 18-day low as a result.
The surge in user activity within Layer-1 (L1) networks is the primary culprit behind this supply crunch. If this trend persists, we might witness ETH soaring to new heights.
Pectra's Impact on Ethereum's Circulating Supply
Some stunning data from Ultrasoundmoney revealed that Ethereum's circulating supply has plummeted since the implementation of the Pectra Upgrade on Wednesday. Currently, it stands at an 18-day low of 120.69 million ETH.
Key features of this long-anticipated network transformation, such as raising validator limits to 2048 ETH, smart wallet functionality, and boosting network efficiency, have sparked a spike in network activity. This increased activity has resulted in a tightening of ETH's supply in the face of rising demand.
Data from Glassnode indicates that Ethereum's active address count hit a 30-day high, indicating a renewed interest in the network. On May 7, the number of unique addresses actively participating in the network, either as senders or receivers, reached a staggering 474,044.[1][2]
Brace Yourself for Skyrocketing Gas Fees and Increased Burn Rate
When Ethereum's active address count surges, more unique wallets engage with the network. This increase in user activity suggests growing demand and network usage, often correlating with higher gas fees and an accelerated ETH burn rate.
With escalating user activity and ensuing transactions flooding the network, gas fees spike, and the ETH burn rate shoots to its highest level since the beginning of May. As more ETH coins get burned, the circulating supply decreases, exerting upward pressure on the altcoin's price.[1][3]
Will ETH Blast through $2,000 or Crash to $1,744?
On the daily chart, ETH trades above the horizontal channel, which has previously confined its price within a range between April 23 and May 7. During that period, ETH encountered resistance at $1,872 and found support at $1,744.
If this upward trend continues, ETH could reclaim the psychologically significant $2,000 price zone and carry on climbing toward $2,235. However, a failed retest of this breakout could send ETH's price plummeting to $1,744. If it fails to hold, the price could descend to $1,564.[1][4]
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[1] Ultrasoundmoney Data, 2023.[2] Glassnode Data, 2023.[3] Etherscan Data, 2023.[4] ETH Price Breakdown: Will Ether Reclaim $2,000 or Retreat to $1,744? - BeInCrypto, 2023.
- The Pectra Upgrade on Ethereum has led to a decrease in its circulating supply, reaching an 18-day low of 120.69 million ETH.
- The increased activity on Ethereum's network, facilitated by features such as smart wallet functionality and improved efficiency, has resulted in a tightening of ETH's supply.
- As more users engage with Ethereum, gas fees are likely to spike, and the ETH burn rate could increase.
- The surge in gas fees and ETH burn rate could contribute to upward pressure on the altcoin's price.
- Alongside Ethereum, the price of altcoins may also be affected by changes in the crypto market, including new ICOs or technological upgrades.
- As crypto enthusiasts eagerly await the potential impact of the Pectra Upgrade, they may choose to 'hodl' their wallets instead of trading, expecting higher prices in the future.
- Commission-free bonuses are offered by various platforms like Plus500, eToro, YouHodler, Wirex, NEXO, and Arkham to encourage users to engage in trading, offering a diversified selection of crypto, stocks, and commodities.
- On-chain data from sources like Ultrasoundmoney, Glassnode, and Etherscan provide valuable insights into the behavior of the crypto market, helping users make informed decisions in their finance strategies.
