Ethereum price under constant selling pressure as zk rollups dramatically reduce demand


  • Proponents have noted that non-custodial DEX dYdX is processing transactions nearly five times the capacity of Ethereum at less than 1% gas. 
  • Analysts expect the demand for Ethereum to drop further as zero-knowledge rollups scale the network. 
  • A sharp hedge fund bought about 25,000x Ethereum of December calls, and analysts expect a price rally based on the size of the flow. 
  • Ethereum price remains under constant selling pressure as ETH whales exchange the altcoin for meme coins and metaverse tokens.

Over 1 million ETH tokens have been burned since the implementation of EIP-1559; despite the dropping supply, the altcoin is under selling pressure on spot exchanges. Proponents consider that the rise in zk rollups has reduced the demand for the altcoin. 

Ethereum is under selling pressure across exchanges 

Analysts at QCP Capital, a digital asset trading firm, noted that a ‘sharp hedge fund’ bought 25,000x Ethereum of December calls earlier last week. The firm expects an Ethereum price rally based on the size of the capital inflow in the transaction. 

Despite the inflow, selling pressure continued to increase in Ethereum. Proponents have noted that the rise in zero-knowledge rollups has negatively impacted the demand for Ethereum. dYdX, a decentralized exchange, processed nearly five times the value of transactions than Ethereum. dYdX paid less than 1% in transaction fees. 

Alongside dropping demand for Ethereum on DEX and in Web3, Brad Laurie, a cryptocurrency educator notes, there are more tokens in the metaverse. The rise of competitors and Ethereum-killers negatively impacted the demand for Ethereum

Interestingly, Ethereum whales have exchanged ETH for Shiba Inu (SHIB), Crypto.com token (CRO) and Chainlink (LINK) over the past two months. This has increased capital rotation from Ethereum to the metaverse and Web3 tokens outside of the ETH ecosystem.

Over 1 billion Ethereum tokens have been burned since the implementation of the London hard fork. ETH price posted nearly 6% loss over the past two weeks. Despite rapidly reducing supply, there is a consistent drop in demand and a rise in selling pressure across spot exchanges. 

Historically, an increase in selling pressure triggers a drop in the altcoin’s price. FXStreet analysts have evaluated the Ethereum price trend and predicted a steep correction to $3,300. 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Decentraland price under pressure by market turmoil, MANA points to steep correction

Decentraland (MANA) has not been able to sit back and enjoy its all-time highs printed on Thursday, above $6.0. MANA price reversed to the downside as a wave of negative news surrounding a new Covid variant hit news wires during the Asian session.

More Cryptocurrencies News

Bitcoin, Ethereum, XRP at discount ahead of Black Friday while investors fear new COVID strain

Over $265 billion wiped off the overall crypto market capitalization in a bloodbath as news of the new Covid strain breaks out. Bitcoin, Ethereum and Ripple prices have tumbled over 6%, and the top 10 cryptocurrencies are trading at a steep discount.

More Bitcoin News

XRP holds key support while indicators point to short-term recovery

Ripple started a recovery wave above a key support level of $1.024. XRP price started an upside correction as indicators suggest a short-term recovery. The coin may initiate a fresh downtrend upon a breakout of the $1.024 support level.

More Ripple News

Dogecoin-killer Shiba Inu hits 1 million holders, gets listed on South Korean exchange

Shiba Inu hit an important milestone of 1 million holders with a rise in the number of investors. The memecoin listed on a South Korean crypto exchange successfully despite strict regulatory requirements. 

More Shiba Inu News

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

BTC

ETH

XRP