ETH is going through a phase of rapid growth which revolves around the recent EIP 1559 upgrade. The cryptocurrency has been heavily bullish, after bottoming out at $1,706 in June, and has almost doubled since then.

ETH has been riding the bullish wave that commenced as a result of the positive sentiments in the market, but its rally was supercharged by the EIP-1559 upgrade. The momentum has so far sent the price as high as $3189 in the last few days, although there has been a slight pullback, possibly due to some profit-taking or the growing threat of regulatory pressure.

The recent shake-ups have not had a major impact on the cryptocurrency market, despite concerns about the Infrastructure bill, perhaps because it has not been passed into law. Meanwhile, ETH has maintained its bullish momentum and is currently trading at $3,120 after rallying by more than 3% in the last 24 hours and 18% in the last 7 days.

Source: Binance

ETH still has a favorable outlook despite its recent rally based on its technicals. For example, its price action is back above its 99-day moving average as a result of the strong buying volumes, and the current performance is in line with crypto market sentiments. In other words, ETH’s rally has been taking advantage of favorable market conditions and positive developments on the Ethereum network.

How long will ETH maintain its bullishness?

ETH’s price action moves in tandem with the rest of the market most of the time because of Bitcoin’s dominance which influences investor sentiments in the altcoin market. It is thus likely that ETH will continue to rally as long as the overall cryptocurrency market sentiment favors some upward price movement. The reverse is also true where negative news in the market may trigger FUD, causing crypto prices to crash. ETH short term outlook will be affected by such factors but the recent upgrade suggests that its long-term outlook is much more favorable.

Ethereum also started burning tokens issued in the first two days after the EIP-1559 upgrade. Token burning reduces the circulating supply of a cryptocurrency, making it more scarce. A cryptocurrency has a higher perceived value if it has a lower number of tokens in supply. Ethereum is thus expected to become more valuable in the future due to its tokenomics which makes it a deflationary asset.

It also helps that ETH derives most of its value from the robust utility it offers on the Ethereum network. The recent network upgrades are geared towards unlocking more value and paving the way for more network adoption, further strengthening the digital coin’s potential value.