What does it mean when millions of dollars worth of cryptocurrency gets burned in one go, over a single day?
This has been the case in the crypto market this week, as investors and traders aren't sure of what to make of things.
A mysterious whale recently burned 2500 Ether tokens (worth about 4.8 million dollars). Nonetheless ETH price got the needed support amid partnership with PayPal.
The Ethereum community now sits unsettled, as an Ether Whale going by "nd4.eth" in the Ethereum Name Service (ENS) transferred a stunning 2,500 Ethereum to a burn address.
Burning isn't uncommon in the world of crypto and blockchains.
Tokens and coins are usually burned to reduce a cryptocurrency's overall supply.
However, this burn event is special, in that nobody knows why or how such a large amount of Ethereum got burned at the drop of a hat. So far, this whale's identity and motivations are still unknown at the time of writing.
This burn event only came to light after a tweet from the blockchain analyst, degeneratewisdom, on Monday this week.
And so far, all we know is that the burn has had a mixed impact on the price of ETH.
Some analysts believe that it could lead to a short-term sell-off, while others believe that it could have a positive long-term impact by reducing the supply of ETH.
On-chain analysts at Lookonchain have provided some insight into the sender's holdings, while the reason for the Ethereum burn remains a mystery.
According to a tweet from the blockchain data analysis platform, this whale currently has a large number of tokens from perpetual trading protocols, including 311,003 Gains tokens worth over $1.43 million and 34,287 GMX tokens worth roughly $1.84 million.
LookOnChain notes that this whale also sent an additional 1.5 ETH, 34.9 GMX, and 600 GNS tokens to the same burn address, totalling $7,000.
Another humorous tweet from the creator of the Wildcat Protocol, Laurence says: "If you don't wake up this morning and say "thank you, nd4.eth for contributing to the ultrasound money narrative"
According to recent reports, PayPal launched its very own dollar-pegged stablecoin called PayPal USD on the Ethereum blockchain.
PayPal CEO Dan Schulman in an interview with Bloomberg, mentioned that this new dollar-pegged stablecoin, which is issued by Paxos Trust Co. is anticipated to become "part of the company's overall payment infrastructure."
Users will reportedly be able to exchange dollar-denominated tokens for cash or other assets on PayPal's platform thanks to its latest stablecoin offering, which is anticipated to function with its existing cryptocurrency services.
The stablecoin will be accessible to qualified U.S. citizens and will allow users to convert any of PayPal's accepted cryptocurrencies in and out of PayPal USD at vendor checkout points.
They will also be able to conduct person-to-person payments using PayPal USD and transfer PayPal USD between PayPal and compatible external wallets.
Ethereum's price action was relatively uneventful over the weekend.
On the daily timeframe, we can see that the RSI sits somewhere below the neutral zone. This indicates that the bears may have a slightly stronger stance than the bulls.
However, according to a recent tweet from the crypto YouTuber, Crypto Rover, an Ethereum breakout may be imminent.
This is evident from the charts. When we consider the longer-term ascending trendline on Ethereum and draw another trendline from the cryptocurrency's $2,100 – $2,000 highs, we end up with this:
The chart above shows a rudimentary symmetric triangle of sorts.
Ethereum is currently testing the $1,818 support. If a break below this support occurs, the cryptocurrency is bound to test the lower support of the triangle around $1,761, before rallying to the upside again.
In all, a breakout is bound to happen very soon as more and more candlesticks get added to the charts.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.