Ethereum Price Prediction As ETH Burned Since The Merge Reaches All-time High

Ethereum (ETH) price is practically unchanged with a mere 0.14% increase over the last 24 hours. The amount of ETH burned since "The Merge" has reached all-time high but has done little to spark optimism among the investors.

The Ethereum network has burned more than 50% of all the ETH issues since "The Merge " event that saw Ethereum migrate from a proof-of-work consensus mechanism to the proof-of-stake on the Beacon chain.

According to data from Ultra Sound Money, the network has burned over 3.5 million ETH out of 6.5 million issued over the two years after Ethereum's EIP-1559 was introduced.

With the current rate, Ethereum is burning approximately 1.75 million ETH each year, resulting in a supply reduction of about 0.98%. From a technical perspective, the platform is gradually shifting towards a deflationary nature as the circulating supply of ETH diminishes over time due to active coin burns within the network.

This is in turn expected to increase the demand for the largest altcoin by market capitalization. In the meantime, ETH price is at risk of more losses as areas around the $1,700 demand zone come into the picture.

Ethereum Price At Risk of a 7% Decline

Between July 14 and August 8, the ETH price action has formed a descending triangle pattern on the daily chart. This pattern is characterized by a sequence of lower highs and relatively stable lows, reflecting a negative market sentiment. If Ether's price closes below the horizontal line of the triangle at $1,823, it would indicate a potential continuation of the on-going downtrend.

In such a scenario, the price of the smart contracts pioneer token could drop lower with the immediate support level situated at the $1,800 psychological level.

An added layer of support is anticipated to emerge from the 200-day Simple Moving Average (SMA) at $1,788, preceding the price reaching the technical target of the current chart pattern at $1,700. Such a movement would lead to a cumulative loss of 7.23% from the current price.

ETH/USD Daily Chart

Supporting the bearish case for the Ethereum price is the Moving Average Convergence Divergence (MACD) indicator and the Relative Strength Index (RSI) which exhibited downward trends. The RSI value of 42 indicated the dominance of bearish sentiment in the ETH price trend.

On the positive side, bullish momentum would require pushing Ether's price above the descending triangle, necessitating a daily candlestick closure above the resistance line at $1,852, embraced by the 50-day SMA. Beyond this point, a formidable supply zone spans between $1,880 flanked by the 100-day SMA and the $1,900 psychological level.

Breaking this barrier would validate a bullish breakout from the triangle, with the bulls then targeting the significant resistance at $1,960, followed by the psychological threshold of $2,000.

This could be where Ether's upside could be capped for the short term.