Uniswap Eliminates 9,001 ETH From Circulation Through Burning Mechanism

Uniswap mostly burn ethereum. (Photo; Doc. Pexels)

JAKARTA Ethereum (ETH), the second largest crypto asset by market cap, is experiencing a burning process that serves to reduce supply from circulation. About 9,001 ETH has been seized through this mechanism. The biggest burning was carried out by the Uniswap decentralized crypto exchange (DEX). The 9.001 ETH burning process lasted for 30 days.

As reported by UToday, the ETH burning process is the impact of the latest Ethereum update called EIP-1559. This update changes the transaction cost mechanism on the Ethereum network, so that some costs will be burned or removed from circulation.

Uniswap, as the most popular decentralized platform, handles many transactions that automatically increase the number of burned ETHs. This burn serves as a deflation factor on Ethereum supply, which could theoretically increase asset value in the long term.

However, the relationship between the number of burning and price movements is not always the same. Although Uniswap contributes greatly to ETH burning, the price of Ethereum does not go up immediately. In the long term, this deflation mechanism is expected to provide support for the price of ETH, due to the decline in supply, assuming demand remains, it should raise the value of any existing ETH.

However, scarcity alone is not enough to guarantee an increase in value. Ethereum must also maintain positive market utilities, adoption, and sentiment. Currently, Ethereum faces challenges from Solana, one of the main competitors in DeFi space, which offers a lower pace and cost. Many traders are interested in Solana for its volatility and potential profits.

From the point of view of technical analysis, the price of Ethereum is currently in a difficult condition. Ethereum struggles to maintain support levels at $2,400 (approximately IDR 37.5 million). If this level breaks, the next support is at $2,300 (approximately IDR 35.9 million), close to the 50-day moving average.

If this level also fails to survive, Ethereum could drop to a psychological level of 2.000 (approximately IDR 31.2 million). On the other hand, if Ethereum could penetrate resistance at $2,500 (approximately IDR 39 million), it could open up opportunities to test the previous highs at $2.800 (approximately IDR 43.7 million).