The supply of Ethereum (ETH) has surpassed its peak from the last two years

Ethereum’s circulating supply has risen sharply over the past week, reaching levels not seen since February 2023. On-chain data shows that 12,353 ETH, valued at over $39 million, has entered the market in the last seven days. This increase, however, coincides with a decline in network demand, which has negatively impacted ETH’s overall performance.

Impact of Circulating Supply Increase

The circulating supply of Ethereum measures the total number of coins or tokens available. In the past week, it has increased by 12,353 ETH, bringing the total to 120.51 million ETH. This level was last recorded in February 2023. Typically, when user activity on the Ethereum network decreases, the circulating supply of ETH tends to rise. According to Artemis data, this trend applies to the proof-of-stake (PoS) network as well.

Decline in User Activity

Last week, the number of unique addresses that conducted at least one transaction with Ethereum fell by 4%. This decline led to a 1% decrease in the daily transaction count on the Ethereum network. The drop in user activity also reflects in the decentralized finance (DeFi) ecosystem, where the total value locked (TVL) decreased by 4% during this period, according to DefiLlama.

ETH Price Prediction: Will It Drop Below $3,000?

The decline in activity on the Ethereum network has hurt ETH’s demand, resulting in a 4% price drop over the past week. An analysis of the ETH/USD daily chart shows that buying activity among market participants remains low. The Moving Average Convergence Divergence (MACD) indicator supports this downward trend; currently, ETH’s MACD line is below the signal line.

This situation suggests a bearish market trend, with selling activity outpacing buying activity. If this trend continues, ETH’s price could fall below $3,000, potentially reaching a low of $2,945. However, if the coin sees a surge in new demand, it could push the price up towards $3,369.