Ethereum prices are back in the doldrums after slumping more than 11% over the past week. The network is also facing inflationary pressures as the ETH supply returns to pre-merge levels due to low demand.

Nevertheless, the Ether bulls remained upbeat and confident that this year will see a new all-time high for the asset.

In a post on X on Jan. 12, crypto trader ‘Mister Crypto’ said he was accumulating because “Ethereum is about to send hard.” The analyst posted a chart from the previous year with uncannily similar patterns which preceded a large move upwards.

Ethereum is about to send hard.

Im accumulating. pic.twitter.com/GoWjHp4rVS

Deflationary Supply to End

Meanwhile, popular crypto commentator ‘CRYPTO₿IRB’ posted a similar chart asking their 698,000 X followers, “Would you be surprised if ETH hit $20,000 this cycle?” which got mixed reactions.

Would you be surprised if $ETH hit $20,000 this cycle? pic.twitter.com/6s9yZRVLLh

On Jan. 12, YouTuber ‘Crypto Rover’ said, “This breakout will teleport Ethereum to $8,000,” while analyst ‘Crypto Caesar’ said it was time for the ETH/BTC ratio to bounce, renewing calls for altseason.

The ratio, which measures the price of ETH in terms of BTC, is at a three-year low of 0.034, according to Tradingview.

Another concern is the network returning to an inflationary supply, which has been the case since April 2024. Over the past nine months, the Ethereum supply has increased by 0.35% and is currently 120.4 million, according to Ultrasound.Money.

“The supply of ETH will likely reach the pre-merge supply within the next few weeks,” observed ITC founder Benjamin Cowen on Jan. 13.

“It is currently increasing by about 45k ETH/month, but the supply is only 32k ETH away from the pre-merge supply.”

“Up until this point, though, demand has remained so low that the supply of ETH has been inflationary for about the last 10 months,” he added.

The narrative at the time of the Merge in late 2022 was that Ethereum fee burning through EIP-1559 would outpace production, and that was the case until April 2024, when supply had shrunk by almost 0.4%.

ETH Price Outlook

Ethereum has remained flat over the weekend but dropped alongside the rest of the market early on Monday to under $3,200.

The asset has tanked almost 15% since its 2024 high of just over $3,700 around a week ago.

ETH has been consolidating at current levels for the past five days and needs to hold them to prevent a larger price collapse below $3,000.

$ETH might dump all the way to $2,800 under this bearish scenario! In that case, it would be a golden opportunity to BUY more #ETH for the long term!

Trade #Ethereum on Bybit https://t.co/TsSnqpda67 pic.twitter.com/yZ0aSYEpyl