The daily ETH burning is at its lowest point of 210 tokens as of August 10, 2024. This is largely credited to the fall in the base fees, which was 100 gwei on August 5, 2024, and later fell to the range of 1-2 gwei. Also, ETH burning was 5,000 on August 5. At the time of writing this article, the price of ETH has dropped by 3.86% to $2,547.69.
Token burning is often associated with marking upticks in the token value. However, Ether seems to be on a different track at the moment. The factor of Spot Ether ETF, which has not yet ceased the outflows of Grayscale’s ETHE, is contributing to this concern. The third consecutive day of outflows occurred on August 9, 2024. A negative value of $15.8 million was collectively recorded by all ETFs.
This is not the first time that a low base fee has made it to the headlines. A previous report from May 6, 2024,noted a decline in the burn rate due to fluctuations in gas fees. Values at that time were ranging within the margins of 5 and 10 gwei.
Insufficient ETH burning is likely to keep price movements under control; however, there is nothing to second guess when the base fee is taking a hit too. Spot Ether ETF is working to curb outflows—something that appeared doable till August 2024. There was a declining trend, with the value dropping from $133.3 million to $19.8 million for ETHE. The following day marked a notably higher negative flow for the ETF. Consequently, the expectation of a positive outflow was dashed.
Eventually, the value of ETH will rise. Analysts speculate that the crash brought about a correction phase that is almost over. The only remaining task is to guide the price upward for a potential rebound. Near-term ETH predictions support this argument. It is anticipated that the current value will experience a 4.39% increase over the next five days, resulting in a maximum value of $2,689.47. The current value of $2,742.67 could experience a 6.46% increase over the next 30 days. Year-end speculation is strong at $4,000.
The 14-day RSI is 36.36. The token is hovering just above the minimum threshold needed to qualify for a lower price. While that shows a neutral sentiment, the token is poised to set a reversal trend, which would then trigger a decent base fee. SMA indicators strongly demonstrate the sentiment. The 5-day SMA and 200-day SMA are $3,218.83 and $3,218.96, respectively, applicable in the same order.
A decrease in gas fees further demonstrates that the network does not have enough confidence at the moment. Investor sentiment is bearish as reports surface, claiming a resurgence of the recession. This has potentially buried the hopes for a rate cut in September.
