Ethereum Supply Shortage Could Propel ETH to $6,000 by 2025, Analysts Say

With Ethereum supply shrinking and institutional demand rising, market analysts predict ETH could reach $6,000 by early 2025. This optimism is fueled by ETH’s recent 40% growth, reduced exchange reserves, and breaking above key technical indicators.

Ethereum market has been on a remarkable upward trend, climbing over 40.86% since November 5 and currently trading at $3,373.69. Scott Melker, host of The Wolf of All Streets Podcast, recently shared his bullish outlook, predicting that ETH could reach $6,000 by Q1 2025. But what factors could drive Ethereum’s price to such new heights?

Ethereum’s “Scarcity Mode”

As Ethereum’s supply dwindles, its scarcity becomes more evident. At the start of this year, Ethereum’s exchange reserves were around 20.52 million ETH. However, this figure has dropped steadily, reaching a low of 18.57 million in August and standing at around 19.15 million today. This depletion indicates a reduced supply in circulation, which, according to economic principles, can push prices up as demand remains strong.

Price Momentum and Key Indicators

Entering 2023, Ethereum traded at $1,198.54, below its 200-day Moving Average (SMA) of $1,386.69. Throughout the year, ETH tested and broke above this line multiple times. By early November, Ethereum’s price soared past the SMA and now trades well above at $3,405.25, reinforcing bullish momentum and raising further optimism among analysts like Melker, who foresee continued gains.

Institutional Investment Rising

An influx of $132 million into Ethereum ETFs recently has drawn attention, suggesting that institutional investors see long-term value in Ethereum. This investment reflects growing confidence and could further support ETH’s upward trajectory.

With ETH supply limited and institutional interest intensifying, analysts see promising potential for Ethereum’s growth in the next year. As scarcity drives the market and large-scale investment grows, ETH could be on its way to hitting $6,000 by early 2025.

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