Ethereum’s Triple Halving is happening as circulating supply plunges

Visa revealed the concept of Universal Payment Channel through a layer-2 network powered by Ethereum. As “The Merge” draws closer, Ethereum reserves across exchanges are dropping. A brewing supply shock is likely to trigger a bull run, pushing the altcoin closer to “Triple Halving.”

Ethereum price crosses $3,000 again on path to Triple Halving

Ethereum reserves across exchanges have plunged consistently over the past few months. With declining reserves, analysts predict a brewing supply shock in Ethereum. Historically, a drop in the circulating supply of a cryptocurrency is associated with a spike in its price. 

Regardless of the altcoin’s price action, its supply on exchanges has taken sharp dips since mid-September 2021. It has hit the lowest level in the past six months, based on data from crypto market intelligence platform Santiment. 

Ethereum supply on exchanges.

Ben Armstrong, Youtuber and creator of BitBoyCrypto.com, recently commented on the dropping supply of ETH,

A downtrend in supply further indicates that market participants are accumulating Ethereum and holding. The wallet addresses holding Ethereum for less than 30 days are on an uptrend. Since July 2021, there has been a 43% spike in wallet addresses holding Ethereum for less than a month. 

Currently, there are 3.87 million wallet addresses holding 19.44 million Ether based on data from blockchain intelligence platform IntoTheBlock.

ETH supply held by 3.87 million wallet addresses.
 

Another key factor for the altcoin’s rally is its social volume. 

Social volume, or the mention of the coin on social media channels, is declining for Ethereum. This metric is considered as an indicator of traders’ interest in the cryptocurrency. An uptick in interest is followed by a drop in price, based on historic trends. 

In the case of Ethereum, the social volume has dropped, this makes it conducive for a price rally. 

Since the last week of July 2021, ETH social volume has waned and capital rotation into L1s took center stage. As we get closer to ETH2, or “The Merge,” when transition from proof-of-work (PoW) to proof-of-stake (PoS) is taking place, proponents expect a spike in social volume. 

Ethereum social volume since September 2020.

Payment giants and financial institutions worldwide are accepting the Ethereum network as a base layer to build innovative concepts in DeFi and traditional finance. 

Visa’s concept of “Universal Payment Channel” that enables payments through Central Bank Digital Currencies (CBDC) on different blockchains relies on Ethereum. The concept will be developed as a layer-2 solution on the Ethereum blockchain. 

Nikhil Shamapant, the analyst behind Ethereum’s “Triple Halving” narrative, acknowledged the bullish developments in the altcoin’s ecosystem. Shamapant tweeted through his investing handle on Twitter, @SquishChaos:

FXStreet analysts have evaluated Ethereum’s price trend. Analysts have predicted that the altcoin will rally to a $3,200 target with a probability of 61.8%.