Ethereum Faces Supply Squeeze: 40% Locked, Analysts See $8K–$10K Fair Value

Analyst Crypto Gucci has shared supply dynamics that suggest faces upward price pressure with over 40% of tokens removed from active circulation. Three concurrent supply vacuums have created conditions not present in previous market cycles.

Digital asset treasuries have accumulated 5.9 million Ethereum worth approximately $24 billion. This is approximately 4.9% of the total supply, according to StrategicEthReserve data. These entities hold tokens for long-term yields rather than active trading.

Staking constitutes the primary supply vacuum with 35.7 million Ethereum staked, worth roughly $146 billion and accounting for nearly 30% of total supply. Most staked tokens remain illiquid due to a 40-day validator exit queue for withdrawals.

Public companies tracked by Ark Investments collectively hold over 12% of total Ethereum supply. Tom Lee’s Bitmine purchased $834 million worth of tokens this week, bringing total holdings to $12.52 billion as the company progresses toward controlling 5% of circulating supply.

Crypto Gucci stated Ethereum has entered this cycle with record institutional demand and the smallest liquid float in its history. “When demand meets a shrinking supply like this, price doesn’t just go up, it goes nuclear,” the analyst posted Tuesday.

Entrepreneur Ted Pillows projected fair value between $8,000 and $10,000 for Ethereum this cycle. He anticipates institutional bidding and potential ETF staking approval could drive strong Q4 performance.

Ethereum supply has increased only 0.5% since the 2022 Merge transition to proof-of-stake according to Ultrasound.Money. Bitcoin supply grew 4% over the same period, making ETH relatively less inflationary.

Analyst Heisenberg identified key technical levels requiring ETH to hold blue support trendline and break above $4,900-$5,000 with conviction. Failure to maintain support could test $3,400, matching last Friday’s brief correction level.

Satoshi Stacker that Ethereum’s MACD indicator flipped red on weekly timeframes. Historical patterns following confirmed weekly red MACD signals have produced drops ranging from 18% to 80% through correction-bounce-correction sequences.

The Kingdom of Bhutan announced integration of its national ID system on Ethereum blockchain this week, though the nation does not currently hold ETH tokens. Nation-state adoption could create a fourth supply vacuum if governments begin stockpiling Ethereum for strategic reserves.