Ethereum To The Moon? ETH Onchain Data Shows Strong Bullish Sign

Ethereum ETH/USD on-chain data is painting a rather bullish picture, as the blockchain's non-fungible tokens (NFTs) are having a much better impact on the cryptocurrency's fundamentals than expected.

What Happened: Cryptocurrency exchanges saw a withdrawal of 180,000 Ethereum within a single day on March 15, this is the highest amount reported for any day in 2022, according to data published in a tweet by on-chain analytics firm Into The Block on Friday.

According to the firm, the last time Ethereum's outflow from crypto exchanges reached similar magnitudes was in October 2021 — right before a 15% price increase that took place within 10 days. Furthermore, 190,000 ETH tokens were also deposited on Lido's Ethereum liquid staking service that compensates its users for one stETH (staking derivative token) for each staked Ether, so they can manage their tokenized stake. The reasoning behind the bullish interpretation of outflow from exchanges is that removing tokens from exchanges usually suggests that their owner does not to expect to sell them anytime soon.

Also Read: 'The Goal Of Crypto Is Not To Play Games With Million Dollar Pictures Of Monkeys': Ethereum Founder Takes Shot At Bored Ape Yacht Club

NFT Activity: In a separate tweet published on Friday, Into The Block also revealed that NFT trading activity has been responsible for the most ETH burning ever since the protocol first introduced the Ethereum Improvement Proposal (EIP) 1559.

User activity on the world's top NFT marketplace, OpenSea alone, resulted in the burning of 230 ETH. According to the tweet, during the peak of the NFT craze in January, Ethereum's net issuance dropped to historic lows of nearly -2%.

As Benzinga reported back in August, Ethereum's London network upgrade introduced EIP 1599 which resulted in the burning of most of the ETH paid for transaction fees — destroying it permanently and reducing inflation.

An in-depth analysis published at the time anticipated Ethereum becoming deflationary thanks to EIP-1559 combined with the future full transition to proof-of-stake (PoS) from the current proof-of-work (PoW) consensus protocol. The reason is that the transition would drastically decrease Ethereum's issuance rate.

Data from Ethereum burning data website Watch the Burn shows that over 2 million ETH of transaction fees have already been burned since the implementation of the update last summer — for a total value nearing $8.9 billion.