Expressing confidence in Ethereum’s future on November 15, @sassal0x, a vocal Ethereum supporter, emphasized the coin’s strong fundamentals. According to the analyst, these factors position Ethereum as a superior choice for long-term value growth compared to other cryptocurrencies, including Bitcoin (BTC) and decentralized finance (DeFi) projects such as Uniswap and Aave.
Ethereum Bulls Capped Below $2,100
Ethereum currently holds the second position in terms of market cap among cryptocurrencies. With its price above the $2,000 mark, Ethereum’s value has more than doubled from its 2022 lows, which were influenced by negative market sentiment following the collapse of FTX, a defunct crypto exchange.
The sustainability of this upward trend is uncertain. Currently, the immediate support level is at $2,000, while prices are trending within the bullish bar of November 9, characterized by high trading volume. For the upward trend to continue, a solid close above $2,100 and the highs of November 2023 would be necessary to validate @sassal0x’s perspective.
Is ETH Ultra Sound Money Yet?
Despite optimism within the crypto and Ethereum communities, ETH bulls have been unable to surpass this resistance level. Nevertheless, experts remain positive about ETH’s potential for upward movement as market sentiment improves. A significant factor contributing to this outlook is Ethereum’s purported transition to “ultrasound money.”
The achievement of “ultrasound money” status for Ethereum as of November 15 is still a topic of debate. In theory, once Ethereum’s burning rate exceeds the inflation rate, the coin will become deflationary. As demand for ETH increases from users paying gas fees for asset transfers or smart contract deployment, Ethereum will burn more coins, making it a “scarce money” and therefore more desirable.
EIP-1559, implemented as part of the London hard fork on August 5, 2021, introduced a burning mechanism that reduces a portion of gas fees, effectively reducing the circulating supply of ETH. According to UltraSound Money, over 3 million ETH has been burned since the activation of EIP-1559.
While billions of ETH are being removed from circulation, the current burn rate has not been sufficient to make the coin “ultrasound” due to the higher annual inflation rate.
ETH burning may accelerate as the market recovers, generating interest in the DeFi and non-fungible token (NFT) sectors. The extended bear market caused a decline in DeFi activity, leading to a reduction in total value locked (TVL), particularly in Ethereum, which fell to as low as $20.5 billion in 2023.
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