Ethereum Bulls Eye $20,000 Despite Recent Drop and Supply Inflation

Ethereum prices are back on the decline after falling more than 11% over the past week. The network is also facing inflationary pressures as the supply of ETH returns to pre-merger levels due to low demand.

However, Ether bulls remained optimistic and confident that this year will see a new all-time high for the asset.

In a post on X on January 12, crypto trader “Mister Crypto” said he was piling up because “Ethereum is about to send strong.” The analyst posted a chart from the previous year with strikingly similar patterns that preceded a big move up.

Ethereum is about to send strong.

I’m piling up. pic.twitter.com/GoWjHp4rVS

— Mister Crypto (@misterrcrypto) January 12, 2025

Until the deflationary offer

Meanwhile, popular crypto commentator “CRYPTO₿IRB” posted a similar chart asking his 698,000 X followers: “Would you be surprised if ETH hits $20,000 this cycle?” which had mixed reactions.

You would be surprised if $ETH did it hit $20,000 this cycle? pic.twitter.com/6s9yZRVLLh

— CRYPTO₿IRB (@crypto_birb) January 13, 2025

On January 12, YouTuber “Crypto Rover” said, “This breakout will teleport Ethereum to $8,000,” while analyst “Crypto Caesar” said it was time for the ETH/BTC ratio to bounce, renewing calls for in the other season.

The ratio, which measures the price of ETH in terms of BTC, is at a three-year low of 0.034, according to Tradingview.

Another concern is that the network will return to an inflationary supply, which has been the case since April 2024. Over the past nine months, Ethereum’s supply has increased by 0.35% and currently stands at 120, 4 million, according to Ultrasound.Money.

“ETH supply will likely reach pre-merger supply in the coming weeks,” ITC founder Benjamin Cowen observed on January 13.

“It’s currently raising about 45,000 ETH/month, but the supply is only 32,000 ETH away from the pre-merger supply.”

“Until this point, however, demand has remained so low that the supply of ETH has been inflationary for about 10 months,” he added.

The narrative at the time of the merger in late 2022 was that Ethereum fee burn through EIP-1559 would outpace production, and this was the case until April 2024, when the ‘offer had been reduced by almost 0.4%.

ETH Price Outlook

Ethereum has been flat over the weekend, but fell alongside the rest of the market early Monday to below $3,200.

The asset is down nearly 15% from its 2024 high of just over $3,700 about a week ago.

ETH has consolidated at current levels over the past five days and needs to hold to avoid a further price collapse below $3,000.

$ETH it could go down to $2800 in this bearish scenario! In that case, it would be a golden opportunity to BUY more #ETH long term!

trade #Ethereum on Bybit – https://t.co/TsSnqpda67 pic.twitter.com/yZ0aSYEpyl

— The Moon Show (@TheMoonCarl) January 12, 2025

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