- Ethereum’s technical pattern suggests a potential dip to $2,800, which could trigger a rally toward $6,000.
- Despite a recent slight price drop, Ethereum’s long-term outlook remains positive, with its market cap at $390 billion.
- Ethereum’s shift to Proof-of-Stake (PoS) has reduced supply, with 53,514.62 ETH burned, potentially boosting its value.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, draws attention because it follows a critical technical pattern that can cause major movement in its price. Popular cryptocurrency analyst Ali Martinez pointed out a forming ascending parallel channel, which means a potential decline to $2,800 might be the springboard that sends it to the $6,000 mark.
At the time of writing, Ethereum is trading at $3,237.94, with a 24-hour trading volume of $35.55 billion. The cryptocurrency’s market capitalization stands at $390.08 billion, which accounts for 11.75% of market dominance. Although it saw a minor fall of 0.42% within these 24 hours, Ethereum shows strong indications of its long-term outlook.
While Bitcoin has outperformed Ethereum in price over the last few months, data provided by cryptocurrency analytics firm IntoTheBlock indicates another story regarding holder behavior. In 2024, the share of long-term ETH holders grew gradually to more than 75%, while that of Bitcoin long-term holders fell to 62.3%. The difference in behavior exhibited by the two leading cryptocurrencies is amazing, considering how their prices have moved over the last year.
Ethereum PoS and burn rate boosting prices
Since Ethereum merged with the Beacon Chain to finally adopt a Proof-of-Stake (PoS) consensus mechanism, the cryptocurrency’s supply dynamics have changed. According to Ultrasound Money, a website that tracks changes in Ethereum’s supply, about 53,514.62 ETH have been burned since the upgrade, which is $175.9 million at current prices.
The total supply of the network is presently at about 120.4 million ETH, burning annually at an annualized rate of 575,000 ETH against the 947,000 ETH issued annually. In this regard, there has been a net growth of 0.31% annualized over the last month, but supply has fallen since the upgrade at an annualized rate of -0.02%.
Ethereum’s uptrend parallel channel formation indicates that the current price levels may be a consolidation for a breakout. If the price were to decline to $2,800, there could be massive buying interest that might propel it to as high as $6,000. This is also consistent with investors’ developing belief in Ethereum’s deflationary pressures and enhanced utility of the network.
While Ethereum has been finding its place as the cornerstone of the cryptocurrency ecosystem, its evolving supply dynamics and holder trends place it for a very promising future. Investors will be watching whether the formation of the ascending channel pattern pans out as projected-a possible signal that this era has indeed begun for ETH.
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