Ethereum’s supply-in-loss data is approaching a historically painful level, and traders are watching closely to see if ETH is building a foundation or heading into deeper losses.
Frequently Asked Questions
Here is a list of FAQs about Ethereums supply being underwater at the same level as the postFTX crash bottom
BeginnerLevel Questions
Q What does it mean that Ethereums supply is underwater
A It means that the total amount of ETH in circulation is currently lower than it was at a specific point in the pastin this case the bottom after the FTX crash Its a way of saying the supply has dropped back to that level
Q Why does the Ethereum supply change
A Ethereums supply changes because of a process called burning Every time a transaction happens on Ethereum a small amount of ETH is permanently destroyed This reduces the total supply New ETH is also created as rewards for validators but if more is burned than created the supply goes down
Q What was the FTX crash and why is that a reference point
A The FTX crash was in November 2022 when the crypto exchange FTX collapsed causing a huge market panic The price of ETH hit a low and the total ETH supply was at a certain number Now the supply has dropped back to that exact same number
Q Is this a good thing or a bad thing
A For many people its seen as a positive sign A shrinking supply can mean less selling pressure and it shows that the network is being used actively Its a signal of network health not a problem
IntermediateLevel Questions
Q How does supply under water compare to a price drop
A Theyre different Supply under water refers to the amount of ETH in existence not its price You can have a low supply but a high price or vice versa Here its saying the supply is back to a low seen during a major crash even though the price may be higher now
Q What caused the supply to drop back to that level