Ethereum (ETH), the world’s second-largest cryptocurrency, is once again outperforming its biggest rival Bitcoin. As of press time, the price of ETH had risen 6%, breaking over key resistance at $3,000 levels.
Even Bitcoin (BTC) has seen a 3.5 percent increase in price, passing $42,200. On the weekly chart, Ethereum is up about 20%, which is 2x against Bitcoin”s increase of 9%. Clearly, ETH has been leading over BTC.
The latest price increase in Ethereum (ETH) is taking place against the backdrop of a strong fundamental buildup. Exchanges have seen massive ETH outflows over the previous week. Nearly 200K ETH was removed from centralized exchanges in a single day as a result of these withdrawals.
Also, as previously noted, after a brief respite, the number of Ethereum whale transactions has increased dramatically. Furthermore, the number of transactions for $100K or more on the Ethereum network has been increasing.
The Merge of Ethereum 2.0 is Coming Soon
With several important advances recently, the Merge between the Ethereum “execution” layer and the “consensus” layer has been the object of most discussion. On the Kiln testnet, the Merge was recently successful.
The launch of Ethereum 2.0 is the most anticipated event in the cryptocurrency world. By switching to the Proof-of-Stake (PoS) ecosystem, the Ethereum network will use 99.5 percent less energy, making it more ecologically friendly. Furthermore, it will significantly increase Ethereum network scalability for DeFi apps while also minimizing transaction costs.
Joe Lubi, co-founder of Ethereum and CEO of ConsenSys, said last week at Camp Ethereal:
“Another exciting thing about moving to proof-of-stake is that proof-of-work requires a lot of issuance of ether [the term used to describe Ethereum the cryptocurrency rather than the network] in order to incentivize these people with heavy infrastructure, to lend their resources and validate transactions on the network. So if you have very light infrastructure, then you can issue much less ether per block that’s constructed”.
Another major driver of the ETH price is the fact that $6 billion worth of ETH has been burned since the adoption of EIP-1559 last August. A startling 2 million ETH have been removed from circulation, putting the network under deflationary pressure.