Since the beginning of November, the price of Ethereum has been on an impressive upward trajectory, with an increase of over 40%. The digital currency is currently trading at $3,400. Scott Melker, host of the podcast The Wolf of All Streets, shared in a recent post on X his prediction that Ethereum’s price could reach $6,000 as early as Q1 2025. The reason? A market phenomenon he describes as “Scarcity Mode.”
Analysts Say Ethereum’s ‘Scarcity Mode’ Could Push Price To $6,000 By Q1 2025 Analysts believe Ethereum has entered “scarcity mode,” setting the stage for a potential rally toward $6,000 by Q1 2025. They point to a repeat of 2023’s bullish setup, where ETH broke out above key…
– The Wolf Of All Streets (@scottmelker) November 12, 2024
Over the course of this year, there has been a significant decrease in Ethereum’s Exchange Reserve, from 20,521,862.99 at the beginning of the year to approximately 19,149,691.51 currently. This reduction in supply, combined with an increase in demand, suggests that the Ethereum market has entered a state of scarcity. According to basic economic principles, scarcity tends to drive price increases.
Price Movement Analysis and Technical Indicators In January 2023, Ethereum was trading at around $1,198.54, well below the 200-day moving average of $1,386.69. Throughout the year, there were several fluctuations, with the price breaking above and falling below the 200-day moving average on several occasions. However, starting in November, there was a strong recovery, leading the price to stabilize significantly above this moving average.
Powered by TradingView Scott Melker predicts that this upward trend will continue in the coming months, supported by both reduced supply and the price remaining above the long-term moving average, indicating a possible rally in early 2025.
Ethereum price also started increasing and managed to break above the $3,200 level. It even traded close to the $3,420 level. On the upside, the price might face resistance near the $3,650 level on the hourly chart. The next major resistance is near the $3,900 level, above which the price might visit the $4,120 resistance.