Ethereum entering scarcity mode - Price > $3,000Here's a short analysis of why the ETH price has been jumping.
I don't think there's a huge upside on ETH, but I think there's a, say 75% probability of going to the $4,000 level (+28%) and a 60% probability of hitting the previous all-time high of $4,800 with a 56% upside.
The price rose to over $3,000, which is a casual +22% gain in just a week.
Let me start by saying that each person has different risk profiles and investment goals. I bought ETH a long time ago at under $1,000, which gives me plenty of room to continue holding it.
Here are some of the reasons behind the recent price action (other than the US elections) and why it might continue driving the price up:
- 42.6% of the ETH supply is locked in contracts, reducing the available supply in the market.
- 28.5% of all ETH is now staked (and rising), reducing the available supply in the market.
- Michigan Pension joins the game and has invested $11M in Ethereum ETFs, reducing the available supply in the market.
- Exchange reserves are at record LOW, which reduces the available supply in the market.
- Ethereum ETF inflows over 20k ETH per day, reducing the available supply in the market.
- SEED_TVCODER77_ETHBTCDATA:2B fresh USDT inflow: A substantial influx of Tether (USDT) increased buying power and interest in the crypto market.
- Pectra upgrade scheduled to Q1 2025 (but there are always delays). This upgrade improves the Ethereum network, and it's considered a big upgrade. Typically, there's positive price action around these upgrades.
- Ethereum has a recursive effect where the price goes up --> more on-chain activity --> more demand for ETH --> more gas fees burned.
When the supply is low, and the demand is high, typically, the price goes up.
Not financial advice.