Ethereum Network Records Deflationary Blocks as London Upgrade Takes Effect
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According to reports, a surge in Ethereum gas fees and ETH burn rates have created about 800 “deflationary blocks” on the network since the launch of the London Hard Fork last week. The network has come under immense pressure over the past few days, which has triggered more gas burns.
Yesterday, the ETH Burn Bot reported the burning of 545 Ether within an hour. With the cryptocurrency’s insurance reportedly at 532 ETH per hour, the network recorded deflation of -13 ETH briefly.
Meanwhile, a higher deflationary burn got detected by the ETH Burn Bot a few hours later, where 945 tokens got burned within an hour, triggering a temporary negative issuance of-417 ETH, resulting in an annualized deflation rate of -3.12%.
That said, when the number of ETH tokens burned is higher than the mining reward, it creates deflationary blocks and temporarily decreases supply.
The London Hard Fork introduced the long-awaited EIP 1559 upgrade, which adjusted the transaction fee calculation system. This adjustment also introduced a system that burns or deletes a percentage of the base fee on every transaction, to reduce supply.
The recent development is not entirely favorable for ETH users, as gas prices have surged again. BitInfoCharts reports that the average transaction price currently holds at $20.
Key Ethereum Levels to Watch — August 11
The second-largest cryptocurrency has finally broken above the critical $3,200 level as the cryptocurrency industry solidifies its bullish momentum. This break comes after a prolonged consolidation between $3,100 and $3,200 since the start of the week.
That said, we expect a bullish continuation to the $3,400 resistance over the coming hours. While the prospects for a bearish move are currently significantly low, we could witness minor dips along the way to the $3,400 – $3,500 area and higher.
Meanwhile, our resistance levels are $3,300, $3,400, and $3,500, and our support levels are $3,200, $3,100, and $3,000.
Total Market Capitalization: $1.94 trillion
Ethereum Market Capitalization: $381.5 billion
Ethereum Dominance: 19.6%
Market Rank: #2
