Ethereum price has formed an inverse head-and-shoulders pattern, pointing to a long-term rebound as the supply continues to dwindle. ETH token was trading at $3,183 on Tuesday, up by over 22% from its lowest level in November.
Ethereum Supply Crash Continues
There are signs that the supply of Ethereum in exchanges has continued falling in the past few months. This supply is going towards staking, digital asset treasury (DAT), and Exchange Traded Funds (ETF).
Data shows that the staking market capitalization has jumped to over $115 billion, which is equivalent to 30% of its market capitalization. Over $2 billion worth of Ethereum tokens have been staked in the past 30 days, most of them being from BitMine.
Ethereum supply in exchanges has also plunged because of the ongoing accumulation by DAT companies like SharpLink and BitMine. Data shows that BitMine accumulated over 200k tokens in the last 30 days to over 4.167 million tokens, which are equivalent to $13.2 billion.
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SharpLink bought nearly 5,000 tokens in the last 30 days to 864,840, which is equivalent to over $3.1 billion. These companies now hold over $19.5 billion worth of Ethereum.
Meanwhile, spot Ethereum ETFs have had over $12.9 billion worth of inflows since their approval in 2024. These funds have added over $584 million in assets this year.
The Ethereum network is also doing well, with data showing that the number of active addresses and transactions is soaring. Active addresses jumped by 53% in the last 30 days, while the number of active transactions rose by 33% to over 60 million.
This growth could continue in the coming months now that the transaction costs have plunged on Ethereum. This decline has led to concerns on whether there will be a need for layer-2 networks like Base and Optimism in the future.
Ethereum Price Technical Analysis
ETH price chart | Source: TradingView
The weekly chart shows that the ETH price has crawled back in the past few weeks, moving from a low of $2,610 in November to the current $3,200.
It has moved above the 25-week Exponential Moving Average, while the coin has formed an inverse head-and-shoulders pattern, a common bullish reversal sign in technical analysis.
Therefore, the coin will likely continue rising in the long term. If this happens, the initial target to watch will be the all-time high of $4,950. A move above that level will see it rising to the ultimate resistance level at $5,000.
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