Since November 5, the Ethereum market has been on a consistent upward trajectory, witnessing a significant increase of over 40.86%. As of now, Ethereum is valued at $3,373.69. In a recent analysis shared by Scott Melker, the host of The Wolf of All Streets Podcast, there is speculation that the Ethereum market might ascend to an impressive $6,000 by the first quarter of the coming year. This article delves into the reasons why experts foresee substantial growth in the Ethereum price by Q1 2025. Here’s everything you need to know!
Ethereum Enters ‘Scarcity Mode’: Could It Fuel a Rally to $6,000?
At the beginning of the year, Ethereum’s Exchange Reserve was approximately 20,521,862.99. This figure has been steadily declining, and when Ethereum’s price peaked at $4,065.092, the reserve was around 19,738,964.89. By August 28, it had reached a low of 18,566,012.24. Currently, the reserve hovers around 19,149,691.51.
The notable drop in Ethereum’s Exchange Reserve, coupled with the rising demand, indicates the market has entered what experts are calling ‘Scarcity Mode.’ According to basic economic principles, scarcity often leads to a price increase, which might be the case with Ethereum.
Parallels to 2023’s Bullish Pattern
At the onset of 2023, Ethereum was priced at around $1,198.54, significantly below the 200-day Moving Average (MA) of $1,386.69. On January 23, the price broke above the MA line, but it didn’t stay far above it for long. The market retested the line on March 10 and June 15, and by August 17, the price had fallen below it. However, in early November, Ethereum surged past the MA line convincingly. Throughout the rest of the year, it stayed well above the 200-day Simple Moving Average (SMA) line. By the end of 2023, the price had risen to approximately $2,223.75, comfortably exceeding the 200-day SMA of $1,861.91.
Scott Melker anticipates a similar upward momentum in the Ethereum market in the coming months, potentially mirroring the bullish trend of 2023.
Analysts Predict Ethereum’s ‘Scarcity Mode’ Could Propel Prices to $6,000 by Q1 2025
Market analysts are of the view that Ethereum’s entry into “scarcity mode” could set the stage for a remarkable rally toward $6,000 by the first quarter of 2025. They draw parallels with the bullish setup of 2023, wherein Ethereum broke past crucial resistance levels.
This year, until late July, Ethereum stayed above the MA line. However, following the peak in March, the gap between the price and the SMA consistently narrowed. On August 1, the price experienced a sharp decline below the MA line, maintaining this position until November 8, when it broke above once again. Now, Ethereum is priced at $3,405.25, significantly above the 200-day SMA of $2,958.42.
Institutional Confidence Rises With ETF Inflows
Highlighting a recent inflow of $132 million into the Ethereum ETF market, experts note a marked increase in institutional interest in Ethereum. This influx demonstrates growing confidence from major financial institutions, which could further bolster Ethereum’s value.
In conclusion, with Ethereum’s supply becoming increasingly constrained and institutional interest on the rise, analysts predict a favorable environment for Ethereum’s price growth in the upcoming year.
