According to recent reports, the Ethereum network has successfully eliminated approximately 70,000 ETH from circulation following its latest major update, the Merge. This significant transition involved a shift from the traditional Proof-of-Work (PoW) consensus mechanism to a more efficient Proof-of-Stake (PoS) algorithm. As a result, the selling pressure on ETH, which currently holds the position of the second-largest cryptocurrency by market capitalization, has been significantly reduced.
In cryptocurrency, decreasing the number of tokens in circulation is a positive indicator for any given asset. This notion aligns with the fundamental economic principle of supply and demand, as a decrease in supply generates scarcity, ultimately leading to a surge in demand and, subsequently, the asset’s value.
As per the analysis of a well-known cryptocurrency expert, Pentoshi, the current surge in Ethereum’s price can be attributed to the diminishing supply of a digital asset. Pentoshi thinks this factor could persist and potentially propel Ethereum’s value to reach $2,000 shortly.
According to a tweet by Pentoshi, Ethereum’s recent price behavior suggests that it may have already initiated a rally toward the $2,000 mark. Pentoshi pointed out that ETH is presently trading above its previous range high, and maintaining this position would indicate a bullish trend. However, the bullish trend will be negated if the price falls below this level.
The analyst exuded unwavering confidence in the ongoing bullish trend, firmly asserting that ETH was poised to hit the $2,000 mark shortly. Astute observations backed his conviction, as he pointed out how the recent Binance FUD had failed to dampen the ETH price, further fueling the bullish momentum driving the current rally.
The recent Binance FUD was triggered by a technical glitch that impacted one of its engines, causing the temporary suspension of certain essential services. However, the situation was promptly resolved, and the exchange reassured its users of the security of their assets.
At the time of composing this piece, Ethereum was exchanging hands at $1,814, exhibiting a commendable 5.14% surge in the past 24 hours.
