The Ethereum price has formed an inverse head-and-shoulders pattern, suggesting a long-term rebound as supply continues to dwindle. The ETH token was trading at $3,183 on Tuesday, up by over 22% from its November low.
Ethereum Supply Crash Continues
There are signs that the supply of Ethereum on exchanges has continued to fall over 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, equivalent to 30% of the market’s total capitalization. Over $2 billion in Ethereum tokens have been staked in the past 30 days, most of them from BitMine.
Ethereum supply on exchanges has also plunged due to ongoing accumulation by DAT companies such as SharpLink and BitMine. Data shows that BitMine accumulated over 200k tokens in the last 30 days, bringing its total to over 4.167 million tokens, equivalent to $13.2 billion.
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SharpLink bought nearly 5,000 tokens over the last 30 days, totaling 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 attracted over $12.9 billion in 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 transaction costs on Ethereum have plunged. This decline has raised concerns about whether layer-2 networks like Base and Optimism will be needed in the future.
Ethereum Price Technical Analysis
ETH price chart | Source: TradingView
The weekly chart shows that the ETH price has recovered over the past few weeks, rising 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 take it to the ultimate resistance at $5,000.
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