- Ethereum price still consolidates following its latest ATH, but the alt prepares a massive rally.
- Three reasons explain the fast decrease in ETH supply, which might trigger surges soon.
- The primary technical pattern indicates that ETH will target $6,300 next.
Ethereum has its price consolidating after the leading alt recorded another ATH on 10 November. Though the crypto has maintained sideways movements, some factors indicate that Ethereum is ready for a massive surge.
ETH Supply Depletes Rapidly
Meanwhile, some factors limit Ethereum circulating supply and might trigger Ethereum’s price towards higher price targets.
Ethereum dominated the crypto space over the last few years with its smart contracts capabilities. The smart contracts on ETH’s network store most of Ether tokens, with about 27% of the asset supply attaining almost 32,000,000 ETH or $143 billion. Out of the 27% coins, 77% remain locked in DeFi.
Ether supply on crypto exchanges is about to touch a 3-year low, a circulation trend that began late last year. For now, crypto exchanges hold 12% of ETH supply, lower than 17.4% in January this year. That shows that market players have no plans to sell, which might dry volatility and liquidity for the altcoin.
The actual Ethereum circulating supply is lower than expected/believed. More than 50% of ETH’s overall supply saw no movement over one year. Only 20% of the token supply was active since 1 October.
EIP-1550, an upgrade that launched fee-burning, removed more than 1 million Ether circulating in the market within three months of its introduction. That resulted in burning almost 1% of Ether’s total supply.
Ethereum Price Eyes $6,300
Ethereum has its technicals and underlying fundamentals suggesting bullishness in the up-and-coming sessions. The alt saw its price printing a cup-handle pattern, measuring a 58% surge to $6,340 from the governing technical formation’s neckline.
Though ETH surged past the $3,971 neckline on 20 October, the altcoin encountered challenges to attain its optimistic aim. Meanwhile, the crypto has to stabilize above the neckline to keep its bullish destination on the radar.
Furthermore, Ethereum reclaimed the 21-day SMA at $4,373 as its support recently, fueling the coin’s possible recovery. ETH will encounter a neared hurdle at 16 November highs of $4,533, then 15 November peak at $4,757 before touching its record high around $4,880.
If sell order spike, Ethereum will secure the closest support near the 21-dSMA at $4,373, then 50-SMA at $4,278. More foothold will showcase at 78.6% FIB retracement at $4,200, then 23 November low of $4,050.