Ethereum (ETH) has seen a strong rally over the past week, after hitting a low of $2,100 earlier this month. With an impressive 25% rise from that low, confidence is once again growing among investors that the price could reach $3,000. However, despite these optimistic predictions, there are some concerns that could hold ETH back.
Supply pressure on the Ethereum market
According to data from TokenUnlocks, the Ethereum market is set for a massive supply surge. Up to 143,000 ETH, worth roughly $350 million, are about to be released by ETH validators. Additionally, another 212,000 ETH will be made available for trading in the coming days, which could further pressure the market.
⚠️ Ethereum faces a huge queue for withdrawals ⚠️
Ethereum is experiencing a significant withdrawal from the network. Over the next 12 hours, approximately 143k $ Ethereum $350 million worth of tokens will be available for users to withdraw.
There is also a total of 212 thousand $ Ethereum Appointment to… pic.twitter.com/kKhhmKjntx
– Token_Unlocks August 8, 2024
This large increase in available supply is likely to put downward pressure on the price. Previous opens of similar size have led to price declines, and this is currently a concern for investors hoping to rally to $3,000.
The current circulating supply of Ethereum is over 120 million ETH. Since the Dencun update, the network has become inflationary, meaning that more coins are being produced rather than burned, as opposed to the deflationary trends that existed before.
Impact on ETH Price
While issuing such large amounts of ETH does not necessarily mean that all tokens will be sold immediately, there is still a risk that a significant portion of the ETH issued will be released into the market. This could slow or even reverse the upward movement of the price.
Historically, opening between 150,000 and 220,000 ETH has led to price declines over the past three months. However, the daily ETH price chart shows a recovery despite the unexpected drop to $2,100 earlier this week.
Given this recovery, not only for ETH but also for BTC, investors are now mainly looking to the upside again. The $3,000 level in particular is an interesting point to break out again. It looks cautiously positive, but the token’s opening could be disruptive.
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