Ethereum (ETH) On-Chain Data Suggests EIP 1559 Upgrade is in Play

Ether(ETH), the second-largest cryptocurrency by market cap has seen a key on-chain trend reversal as ETH saw a net inflow of funds for the first time since April. On the other hand for Bitcoin, the tide has reversed and the top cryptocurrency registered a net outflow of funds. The trend reversal for ETH is being attributed to the upcoming EIP-1559 upgrade scheduled to be updated in the upcoming London hardfork.

The net inflow of funds in Ethereum suggests more traders are buying ETH at the moment. Analysts also beleive EIP-1559 could be driving the current sentiment.

The upgrade promises to resolve the gas fee crisis on Ethereum that has plagued the network at the peak of the bull run. The upgrade would make the transaction cost more stable and burn gas fees with each transaction. If successful, the upgrade could make ETH a deflationary asset where supply decreases over time.

The London hard fork’s first testnet Ropsten went live last week while the second testnet Goerli will go live today followed by Rinkeby testnet on July 7. The net inflow of funds for Ether could be because of the same.

ETH Rises Over 20% to Regain $2,000

Ether price has shown great recovery over the past three days this week, rising over 20% to regain the $2,000 price range. ETH is currently trading at $2,154. Like most of the altcoins, ETH had lost more than half of its valuation over the past couple of months, falling from an all-time high of $4,362 recorded in May. However, the on-chain metrics remain as strong as ever.

Ether recorded a new high after its number of active addresses surpassed that of Bitcoin for the first time since the beginning.

About Author

An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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