Ethereum (ETH) may be on the verge of entering a powerful new phase. According to multiple analysts, the available amount of ETH on the market is reaching a historic low, while demand – especially from institutional players – is accelerating. This combination of scarcity and growing interest could, according to experts, trigger a significant price move. The question is: what is causing this “supply crisis”?

Three forces creating a historic ETH supply shortage

Analyst Crypto Gucci even refers to three “supply vacuums” – forces that pull Ethereum out of circulation. When these forces occur simultaneously, the amount of freely tradable ETH becomes increasingly limited. These are the three main factors:

1. Staking (±30% of all ETH)
More than 35.7 million ETH is locked in staking contracts. These tokens are temporarily unavailable on the market, and it can take weeks before they become liquid. Stakers support the security of the network and receive rewards in return, which encourages many holders to keep their ETH rather than sell.
2. Ethereum spot ETFs (5.6% of the supply)
Since the approval of the US Ethereum ETFs, 6.84 million ETH has been purchased by these funds. These tokens are typically held long-term as collateral for the ETFs.
3. Reserve companies (4.9% of the supply)
There are now 70 publicly listed companies that hold Ethereum as part of their reserves. Together, they own another 5.9 million ETH.

Combined, this means that over 40% of all ETH has disappeared from circulation. According to Gucci, this is the first cycle in which all three of these forces are active at the same time: “That has never happened before.”

Why analysts are bullish on Ethereum

When supply and demand become so imbalanced, some analysts believe it could lead to an explosive price surge for Ethereum. Gucci even describes this scenario as “nuclear”. Other well-known analysts share this optimism.

Dutch analyst Michaël van de Poppe notes that the Ethereum price is currently forming a higher low, which is often seen as a sign of strength. According to him, ETH could break out within one to two weeks, potentially heading towards a new all-time high. Benjamin Cowen expects Ethereum to rise to at least $5,300. From the current price level, this would represent a gain of nearly 28%.

Break above $5,000 could trigger altseason

According to Cowen, a convincing breakout above the psychological barrier of $5,000 could mean more than just gains for ETH. He believes such a move could mark the beginning of a new alt season – a period in which altcoins rally massively. However, he adds an important condition: “Without Ethereum above $5,000 AND Bitcoin at new all-time highs, an alt season is simply not possible.”

Cowen also argues that Bitcoin dominance must rise first before altcoins have room to move strongly. That may sound counterintuitive, but historically, major altcoin rallies often occur after a strong BTC phase.

What does this mean for the market?

The data paints a clear picture:

Less and less ETH available on the market

Staking, ETFs and companies remove large amounts from circulation;

Institutional interest is increasing;

Technical structure looks strong;

Analysts expect a possible breakout.

Still, it is important to remain realistic: markets can be unpredictable, and nothing rises in a straight line. A breakout of the ETH price above key levels is still needed to confirm the bullish scenarios. However, Ethereum appears to meet all conditions for entering a new phase – and if scarcity continues to grow, every extra bit of demand could make the difference.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making any decisions.