Ethereum Supply Falls Below EIP-960 Threshold

Ethereum's Historic Supply Milestone

Ethereum has reached a significant milestone as its circulating supply dips below the critical threshold initially proposed in EIP-960. This development marks a pivotal moment in Ethereum's history, aligning unintentionally with co-founder Vitalik Buterin's vision of scarcity for the cryptocurrency.

Understanding EIP-960

EIP-960 was a proposal introduced by Vitalik Buterin in 2018, suggesting a hard cap of 120,204,432 ETH to enhance the platform's economic sustainability. The idea was to create a predictable monetary policy similar to Bitcoin's, aiming to instill scarcity and drive value. However, the Ethereum community opted for a flexible supply policy that adapts to network demands.

Transition to Proof-of-Stake

The reduction in Ethereum's supply is primarily due to its transition to a proof-of-stake (PoS) consensus mechanism and the implementation of EIP-1559. This upgrade introduced a mechanism for burning transaction fees, effectively reducing the overall supply and indirectly realizing Buterin's vision of scarcity.

Ethereum's Price Dynamics

Examining Ethereum's price trends reveals a bullish outlook. The current price is above several moving averages, with the 50-day moving average surpassing the 100-day and 200-day averages. This setup is often seen as a positive indicator.

Market Indicators and Trends

Ethereum has experienced notable trading volume, reflecting strong market interest. The price has encountered resistance at higher levels but found support at the lower end, suggesting a potential consolidation phase. Technical indicators, such as the Relative Strength Index (RSI), show a moderate range, signaling no immediate pressure for extreme buying or selling actions.

This milestone in Ethereum's supply dynamics underscores the evolving nature of the cryptocurrency market and its potential future directions.