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

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.