Can ETH Shanghai fork, NFT Surge, make Ethereum No. 1: Analysis
Ethereum stands second to Bitcoin in market capitalization but leads the industry in smart contracts, NFTs and protocols. The recent announcement of the Shanghai fork, EIP-4895, expected in March 2023, is expected to fuel its growth. Also, in the NFT arena, Ethereum is experiencing a positive surge, with major high-value NFTs available with them. Recently Ethereum’s total circulation supply reached its post-merge low of around 120.5 million tokens.
What is ETH doing?
Reaching its post-merge low, attaining deflationary status due to frequent burning, had caused the available tokens to reduce as the thumb rule dictates; the lesser the number of a token, the better the price. It increases its scarcity; thus, FOMO fuels the price. This decreasing supply could be linked to a surge in Bitcoin prices (trading at $23,769.51) and rising equity prices. Generally, traders respond by buying higher-risk tokens available on-chain only.
The circulating supply is a fundamentally important variable many traders and analysts lookup while analyzing the price. Some estimates hint that nearly 1.9 million ETH would be burned annually, with only 622,000 ETH expected to be released.
At the time of writing, ETH is trading at $1,6995.15 with a jump of 6.18%; its value against Bitcoin surged by 2.56% to be at 0.07009 BTC. Its market capitalization jumped by 6.18% to be at $204 billion; At the same time, there was a massive spike in the volume of 59.76% fueling it to $9.9 billion in the last 24 hours.
Proudly sitting at rank 2 and sharing a market dominance of 18.75%, ETH is looking forward to sitting at the number one spot soon. The current rate is 65.88%, down from its all-time high of $4,891.70 achieved on November 16, 2021, and is 396406.76%, up from its all-time low of $0.4209 ETH hit on October 27, 2015.
The overall sentiment of the crypto industry is towards the positive side, thus experiencing growth throughout the market. The same is true with ETH; A somewhat clearer uptrend is visible towards the Supply zone, with R1 at $1795.64 and R2 at $2032.84.
Due to this upward movement, the price is expected to cross R1 and consolidate in the supply zone before breaking towards the north. If this sentiment gets reversed, the price could drop towards the Demand zone, providing S1 at $1236.88 and S2 at $1083.28. Although the chances of a drawdown breaking the demand zone clean are quite rare, citing the current sentiments.