PelinayPA2025-09-08

Mining Pressure on Ethereum Is Gone. Price Is Seeking a New Peak.

The chart compares Ethereum’s price (black) with mining difficulty (blue). 2016–2021: Difficulty rose alongside price. Mining activity expanded during rallies, strengthening network security. Both peaked in the 2021 bull market. 2022 (Pre-Merge): Difficulty surged due to the “Difficulty Bomb / Ice Age.” After the Merge, Ethereum shifted to Proof-of-Stake (PoS), mining ceased, and difficulty dropped to zero. This ended miner-driven sell pressure and changed ETH’s supply dynamics. With staking and EIP-1559 burns, ETH became increasingly deflationary. 2023–2025: Difficulty remains flat at zero, while ETH recovered from $1.2K to around $4.3K. Implications: PoW era: Price and difficulty were highly correlated more miners meant more security and stronger network activity. PoS era: That correlation disappeared. Difficulty no longer predicts price. Current price drivers: Staking dynamics: Locked ETH reduces circulating supply. Deflationary pressure: High gas fees trigger ETH burns, supporting long-term value. Institutional demand: ETFs, Layer-2 expansion (Arbitrum, Optimism, Base), and DeFi adoption boost growth. Macro risks: Fed policy and regulations remain external pressures. With no mining, Ethereum faces no structural sell pressure. Supply is often deflationary, creating scarcity similar to Bitcoin’s halving effect. Key resistance: The $4.8K all-time high. A breakout could target $6K–$7K. Support: $3.6K–$3.8K range holding it sustains a healthy uptrend. Difficulty has lost relevance post-Merge, but Ethereum’s new tokenomics introduce lasting scarcity. This structural shift supports a long-term bullish outlook.