Ethereum‘s value has dropped significantly, over 11%, during the last week, sending prices into a slump once more. Meanwhile, the Ethereum network is grappling with inflation concerns because the ETH supply is returning to its previous amounts before merging, due to insufficient demand.
Despite some challenges, the Ethereum optimists stayed positive and hopeful that the value of the asset would reach a record peak this year.
On January 12th, in a post on X, the crypto trader known as ‘Mister Crypto’ stated that he was amassing Ethereum because it appears poised for a significant surge. The analyst shared a chart from the previous year which exhibited strikingly similar patterns that preceded a substantial upward trend.
Ethereum is about to send hard.
I’m accumulating.
— Mister Crypto (@misterrcrypto) January 12, 2025
Deflationary Supply to End
Currently, the well-known cryptocurrency analyst ‘CRYPTO₿IRB’ shared a comparable graph and posed a question to their 698,000 followers: “Is it surprising that ETH might reach $20,000 during this cycle?” This query sparked varied responses.
Would you be surprised if $ETH hit $20,000 this cycle?
— CRYPTO₿IRB (@crypto_birb) January 13, 2025
On January 12th, YouTube user ‘Crypto Rover’ expressed the view that the current breakout could propel Ethereum to reach $8,000, while analyst ‘Crypto Caesar’ suggested it was an opportune moment for the ETH/BTC ratio to rebound, fueling discussions about a potential “altseason.
The cost of Ethereum (ETH) relative to Bitcoin (BTC), as indicated by Tradingview, has dropped to its lowest point in three years, currently standing at approximately 0.034.
A worry arises from the network once again experiencing an increase in its supply rate, a situation that has prevailed since April 2024. Over the last nine months, the Ethereum supply has grown by approximately 0.35% and currently stands at around 120.4 million, as reported by Ultrasound.Money.
According to ITC’s founder, Benjamin Cowen, it is expected that the amount of Ether (ETH) in circulation will return close to its pre-merge level within a few weeks as of January 13th.
Right now, it’s growing at a rate of approximately 45,000 Ether per month. However, its current supply is just 32,000 Ether short of the pre-merge supply level.
As an analyst, I’ve observed that the demand for Ethereum (ETH) has been relatively low over the past ten months, which in turn has made the supply of ETH inflationary during this period.
In late 2022, discussions centered around Ethereum’s EIP-1559 fee burning mechanism, suggesting that it would exceed production. This held true until April 2024, at which point the Ethereum supply had decreased by nearly 0.4%.
ETH Price Outlook
Over the weekend, Ethereum maintained its current level, but it dipped below $3,200 when the broader market declined at the start of Monday.
The asset has tanked almost 15% since its 2024 high of just over $3,700 around a week ago.
For the last five days, Ethereum (ETH) has been maintaining its current prices. It’s crucial for it to keep these levels to avoid a significant drop in price falling below $3,000.
If this bearish situation unfolds, the price of ETH could drop as low as $2,800. This potential decline might present an excellent chance to invest in more ETH for the long term.
Trade #Ethereum on Bybit –
— The Moon Show (@TheMoonCarl) January 12, 2025
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2025-01-13 11:22