Ethereum’s Supply Dwindles: Is the Price on the Brink of a Comeback?

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Well now, gather ’round, folks! It seems Ethereum‘s supply on those fancy exchanges has plummeted to a level not seen since the days when folks were still trying to figure out what a blockchain was. We’re talking about a mere 8.97 million ETH, which is about as scarce as a good cup of coffee in a sleepy town! ☕️

According to a recent analysis by Santiment, this drop is largely due to the rise of decentralized finance and the fine art of staking. It appears that more and more holders are locking up their assets tighter than a miser with his last penny, rather than leaving them on exchanges. In fact, Ethereum’s exchange supply has taken a nosedive of 16.4% in just seven weeks! Talk about a long-term accumulation trend! 📉

But hold your horses! This supply squeeze hasn’t done a lick of good for Ethereum’s price, at least not yet. ETH has taken a tumble of 47% from its December high of $4,105 to a measly $1,990 as of March 21. It’s like watching a once-mighty river dry up into a puddle! 🌊

On-chain and technical indicators are suggesting that the road ahead might be bumpier than a dirt path in a thunderstorm. Standard Chartered analysts have recently slashed their ETH price target from a lofty $10,000 down to $4,000, citing fierce competition from other networks, especially those layer-2s that are popping up like weeds in a garden. 🌱

These layer-2 networks are luring users away with their lower fees, leaving the mainnet feeling a bit neglected. According to DeFiLlama, last week’s volume processed by Ethereum-based DEX protocols was a staggering $9.8 billion, with Arbitrum and Base handling a hefty chunk of that. It’s like watching a two-horse race where one horse is just trotting along while the other is galloping ahead! 🐎

Monthly DEX volume on Ethereum has plummeted from $92 billion in December to $82 billion in February, and it looks like March might not be much better. This drop in mainnet usage has hit Ethereum’s fee revenue harder than a bull in a china shop, falling from $218 million in December to a paltry $46 million in February. Ouch! 💸

Even though transactions are now cheaper thanks to the Dencun upgrade, which slashed gas fees by 95%, Ethereum’s revenue continues to slide down the slippery slope. Its total value locked has also dropped from $76 billion in December to $46 billion. It’s like watching a once-bustling town turn into a ghost town! 👻

But wait! There might be a glimmer of hope on the horizon. A potential lifeline could come from the staking of exchange-traded funds. Both the New York Stock Exchange and Chicago Board Options Exchange have thrown their hats in the ring, asking the U.S. Securities and Exchange Commission to allow staking in Ethereum ETFs. However, with Ethereum Spot ETFs seeing $370 million in outflows last month, it seems institutional interest is as low as a snake’s belly in a wagon rut. 🐍

On the technical side, Ethereum is still on a downward trajectory and is facing resistance at $2,042. The 50-day moving average is acting like a stubborn mule, and the Bollinger Bands are showing low volatility, suggesting a bit of consolidation. 🐴

ETH is trying to recover from those oversold conditions, but it’s lacking the momentum of a runaway train, according to the RSI, which is sitting at a mere 41.22. While weak volume indicates trader uncertainty, a slight uptick suggests some folks are starting to accumulate. 🏗️

The next targets are $2,163 and $2,370 if ETH can muster the strength to break above $2,042. But if it can’t hold onto $1,986, we might just see it tumble down to $1,714, where previous buying interest has shown its face. It’s a wild ride, folks! 🎢

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2025-03-21 07:33