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ethereum price eth eip-1559
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Bullish Ethereum Fractal Appears As Important EIP-1559 Upgrade Debuts

Tony Spilotro by Tony Spilotro
11 months ago
in ETH
Reading Time: 3 mins read
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All eyes today are on Ethereum as the long-awaited EIP-1559 launches for the first time. The supply-focused update could result in a the start of a spectacular show that could last another several months.

A fractal has potentially appeared that mimics the price action just ahead of the most recent explosive Ether rally, which took the top altcoin by market cap from below $1,000 to more than $4,000 at the peak. And it all is happening as the London hard fork is implemented into the most important blockchain in the space.

What Is EIP-1559 And Why Does It Matter?

Today, Ethereum Improvement Protocol 1559 will be set live as part of the London hard fork. The upgrade will help to normalize ETH gas fees that during the peak NFT and DeFi boom of 2021, sent costs skyrocketing.

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Base fees will be algorithmically determined by the network, however, the user can also increase the fee to in essence “tip” a validator. To prevent validators from artificially flooding the network to keep fees high, validators don’t get this base fee, instead it is burned.

By destroying coins and taking them out of the circulating supply, investors believe this can further impact the ongoing “supply shock” or lack of ETH reserves on exchanges currently.

In addition to this new EIP-1559 upgrade that could impact supply, it is part of a greater Ethereum 2.0 update. More than 5% of the entire supply is now locked up in the ETH 2.0 smart contract, in addition to the massive amount of tokens tied up in DeFi protocols.

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With so few ETH to go around, the supply shock could be very real and it arrives at the same time that a potential fractal is appearing on the ETHUSD price chart.

ethereum eip-1559 fractal

Does an Ether fractal point to another parabolic rally? | Source: ETHUSD on TradingView.com

Supply Shock Ethereum Fractal Fits Blueprint To Substantial Highs

Ethereum was among the cryptocurrencies hit the hardest from the historic Q2 selloff. From the exact peak to the low, the second largest coin in the space by market cap plummeted by 61.8%.

Related Reading | The Ominous Ethereum Comparison That Will Leave Bulls Petrified

The peak was followed by two consecutive bumps, followed by a break of downtrend resistance. Zooming out, shows that the same exact pattern formed just ahead of the cryptocurrency’s more than 1,000% rally. Taking the price action on the way up and juxtaposing it over the recent consolidation, and there’s a very similar trajectory potentially forming.

ethereum eip-1559 fractal 2

Could the EIP-1559 upgrade cause an extended fifth wave? | Source: ETHUSD on TradingView.com

Zooming out further, the entire structure fits and five-wave bullish impulse according to Elliott Wave Theory. Even the math adds up. Waves 1, 3, and 5 move up with the primary trend, while even numbers 2 and 4 are corrective phases.

Related Reading | Fundamentals Suggest Cryptocurrency Is Massively Undervalued

Waves 2 and 4 tend to swap in severity, with wave 2 this time falling under the weaker of the two. The top altcoin only then suffered a 38.2% drop – another Fibonacci retracement level. Wave 4 reached the full 61.8% in severity, and if the bottom is in, a whopping wave five could be next.

Wave 1 resulted in 450% returns, and wave 3 added another 1300% to boot. An extended wave 5 could yield dramatic results. Is this what is to come next for Ethereum and could it be due to the EIP-1559 upgrade?

Potential last leg up in #Ethereum looks almost too easy to spot. Is this time really different? https://t.co/V0q2ied5aU pic.twitter.com/rDyJ6uscDB

— Tony "The Bull" Spilotro (@tonyspilotroBTC) August 5, 2021

Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

Tags: cryptoeip-1559ETHEtherethereumethusdETHUSDT
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Tony Spilotro

Tony Spilotro

I'm Tony Spilotro. Behind the pseudonym, I'm a global remote work leader with a decade of award-winning content experience and excellence. Here, I explore my newfound passions pertaining to privacy, finance, economics, politics, cryptography, property rights, and other libertarian-esque views. I am a Bitcoin evangelist, maximalist, and educator whenever I can be, helping to spread its message of freedom from government control, monetary policy mismanagement, and passing the buck - literally – to future generations. My journey from a curious retail crypto investor to a serious Bitcoin advocate, trader, and technical analyst is an unusual one, but life-changing nonetheless and has become less about money and more about a long-overdue revolution. While a firm believer in the laws governing math and science, I am profoundly fascinated by the impact of astrology and astronomy including moon and solar cycles and planetary alignment and their ability to influence and potentially predict markets. It hasn't yet clicked for me as to how to put anything to use, but I consider it my current rabbit hole I can't yet dig out of. My perspective of growing up alongside the internet, the dot com era, the Great Recession, and roots in video games collecting coins and rare items caused Bitcoin to immediately make sense to me. Through all of these lenses, I seek to produce content that is educational and entertaining, and I thank you sincerely for taking the time to read what I have to say. Please follow me on Twitter at @tonyspilotroBTC and feel free to drop me a line if you would like to work together.

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