Home Altcoins News Ethereum Bulls Target $20K Despite Supply Concerns and Recent Slump

Ethereum Bulls Target $20K Despite Supply Concerns and Recent Slump

Ethereum bull

Ethereum (ETH) has experienced a rocky start to 2025, with the price of the second-largest cryptocurrency slipping by more than 11% in the past week. Despite the recent downturn, optimism remains high among Ethereum enthusiasts, many of whom still believe the digital asset is poised to reach new heights this year. In fact, some market analysts predict that Ethereum could hit $20,000 during this cycle, despite the current inflationary pressures on the network and the weak demand for ETH.

Inflationary Pressures on Ethereum’s Supply

One of the most significant challenges facing Ethereum at the moment is the inflationary pressures on its supply. Since April 2024, Ethereum’s supply has been on the rise, with the total number of ETH coins increasing by 0.35% over the past nine months. The latest figures show that Ethereum’s supply currently stands at 120.4 million ETH, with predictions that the network will soon reach its pre-merge supply levels. As of January 2025, Ethereum’s supply is growing at a rate of about 45,000 ETH per month, and analysts are projecting that it will surpass the pre-merge supply within the next few weeks.

This inflationary pressure has caused concern in the crypto community, as many had anticipated that the Ethereum network would experience deflation after the Merge in late 2022. At that time, Ethereum introduced fee burning through EIP-1559, which was expected to reduce the supply of ETH over time. For a while, this deflationary model worked, and the network experienced a decrease in supply by nearly 0.4%. However, since April 2024, low demand for Ethereum has resulted in an inflationary supply, undermining the deflationary expectations.

Optimism Amid the Slump

Despite the increased supply, Ethereum’s bulls remain optimistic about the asset’s potential. On January 12, prominent crypto trader ‘Mister Crypto’ shared a bullish sentiment on X (formerly Twitter), introducing that he was accumulating Ethereum, citing the expectation that “Ethereum is about to send hard.” He highlighted similarities between current market conditions and patterns from the previous year, which preceded significant price increases. Many investors and analysts see Ethereum’s current correction as a short-term obstacle, with bullish sentiment still holding firm in the long run.

Another crypto influencer, ‘CRYPTO₿IRB,’ echoed this optimism, sharing a chart on January 12 asking their 698,000 followers if they would be surprised if ETH reached $20,000 during this cycle. While reactions were mixed, the bullish sentiment from high-profile analysts remains strong. Additionally, YouTuber ‘Crypto Rover’ forecasted that Ethereum’s breakout could lead to a price surge to $8,000, while analyst ‘Crypto Caesar’ renewed calls for an altseason, citing Ethereum’s low ETH/BTC ratio as an indicator of an upcoming market shift.

The Importance of Holding Key Levels

Despite these optimistic projections, Ethereum faces the critical challenge of holding key support levels. The cryptocurrency’s price recently dipped below $3,200 and has been consolidating around these levels for the past five days. This consolidation phase is crucial, as failure to hold above $3,000 could lead to further declines, potentially pushing Ethereum to test lower support levels. A more significant drop below $3,000 would significantly dampen the bullish outlook for Ethereum, potentially delaying any upward movement toward new all-time highs.

Ethereum’s price action in the coming weeks will be pivotal in determining whether it can recover from its recent slump and continue its bullish trajectory. If Ethereum can stabilize above $3,200, the path toward higher price targets, including the possibility of $8,000 or even $20,000, will remain intact. However, if the inflationary pressures persist and market demand remains tepid, Ethereum could face further challenges, stalling its progress toward a new all-time high.

Conclusion

In summary, while Ethereum’s price has recently experienced a setback due to inflationary pressures and weak demand, the long-term outlook remains bullish. Analysts continue to predict a significant rebound in 2025, with some eyeing prices as high as $20,000. However, maintaining key support levels and addressing concerns over the increasing supply will be critical factors for Ethereum’s success in reaching these lofty price targets. The cryptocurrency community will be watching closely to see if Ethereum can overcome its current challenges and chart a path toward new all-time highs this year.

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James

James T, a passionate crypto journalist from South Africa, explores Litecoin, Dash, & Bitcoin intricacies. Loves sharing insights. Enjoy his work? Donate to support! Dash: XrD3ZdZAebm988BfHr1vqZZu6amSGuKR5F

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