regardless of Ethereum’s strange price action over the past few days, the second largest crypto by market cap has been breaking records behind the scenes. according to Ultrasound moneyETH supply deflation recently hit a record high as total ETH supply has dropped by nearly 1% in the past 30 days.
This drop in supply comes as the price of ETH has been falling in recent weeks and is now showing a bullish trend. Over the past three days, ETH has rallied by nearly 10% after recovering from last week’s massive losses.
Deflation Rises As Ethereum Supply Falls
No doubt, Ethereum’s transition to proof-of-stake consensus has been a blessing for the network. Not only does it have a positive impact on the supply of these assets, but it is also beneficial for the growth of the network.
According to data from Ultrasound.money, the the Ethereum network now ramping up to deflation because the network provider has plummeted by 63,287 ETH at the time of writing since the merger took place last September.
With the Ethereum supply currently at 120.457 million, the ETH burn rate has moved to 1,219,000 and its supply has also decreased by 0.44% over the past 30 days. This proves that these assets can only continue to decrease in supply over time and eventually lead to deflation.
As described by Ultrasound.money, the supply of Ethereum will reach 117 million in 2025. The issuing reward for stakers is estimated to be about 4% per year, exceeding the burn rate for non-stakers, which is about 1.8% per year.
Meanwhile, most of the fire in ETH that caused the supply to increase can be attributed to ETH transfers from major DeFi applications including Uniswap, Tether, and the recently hyped Blur airdrop that caused a surge in Ethereum network activity.
Overall, the ongoing deflationary record and continued decline in Ethereum supply could eventually push the price of ETH higher than it is now, especially as demand continues to rise thanks to the network. dominate in DeFi and the NFT ecosystem.
ETH’s Continuous Rally
The price of ETH has rallied nearly 15% in the last few days, and at the time of writing, the surge does not appear to be slowing down as the asset recently broke above $1,700 to trade at $1,741. The asset’s price is now up 8% in the last 24 hours.
In contrast, ETH trading volume also showed major buying pressure as asset volume increased from $8.6 billion on Monday to $15.9 billion over the past 24 hours. Ethereum’s market capitalization grew by more than $20 billion during the same period.
Meanwhile, Ethereum is still down 64% from its $4,891 high seen in November 2021 despite the rally. with Ethereum Shanghai Update draw closing in the middle of a bullish cycleit is possible that ETH could see a rebound near the peak or beyond.
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