Circulating supply has dropped below a critical threshold originally set in EIP-960. This milestone marks a pivotal moment in Ethereum’s history, as the supply of ETH has now fallen below the proposed (but rejected) hard cap suggested by Ethereum co-founder Vitalik Buterin.
Story behind EIP960
EIP960 was a proposal made by Buterin in 2018 that recommended setting a hard cap of 120,204,432 ETH on Ethereum’s supply to ensure the platform’s economic sustainability under a variety of circumstances. The rationale was to create a predictable monetary policy similar to that of bitcoin, instilling a sense of scarcity and potentially driving up value. However, the Ethereum community did not adopt this proposal, preferring to maintain a flexible supply policy that adapts to the needs of the network.
The fact that Ethereum’s supply has now fallen below this cap is an inadvertent nod to Buterin’s vision of scarcity. It is a byproduct of Ethereum’s transition to a proof-of-stake (PoS) consensus mechanism and the implementation of EIP-1559, which introduced a transaction fee burning mechanism that reduced overall supply.
Ether’s price efforts
Turning to the price chart, there is a visual representation of Ethereum’s recent market performance. The chart shows a price trend with the following key observations:
Moving Averages: The chart shows that the price is currently above several moving averages, indicating a bullish trend. The 50-day moving average (MA) appears to be above the 100-day and 200-day MAs, which is often interpreted as a positive sign.
Volume: There has been significant trading volume, which can indicate strong market interest and support for continued price movement.
Resistance and Support Levels: The price appears to have encountered resistance at the higher levels, but has found support at the lower levels, indicating a potential consolidation period.
Technical Indicators: Indicators such as the Relative Strength Index (RSI) can provide insight into whether ETH is currently overbought or oversold. The RSI appears to be in a moderate range, indicating no immediate pressure towards either buying or selling extremes.
