Ethereum is expected to record the biggest monthly gain since April, and analysts remain bullish

Analysts remain bullish as Ether (ETH, 5.77%) posts monthly gains of more than 10%. Data tracked by Skew shows that ETH is the best performing major asset this month, with Bitcoin (BTC, -0.55%) in second place with a gain of nearly 15%. One analytics firm says Ether could be facing a supply squeeze.
Analysts remain bullish as Ether (ETH, 5.77%) heads for a monthly gain of more than 10%.
It was the second straight monthly rebound and the biggest since April, when prices surged nearly 45%, according to CoinDesk 20 data.
Data tracked by Skew shows that ETH is the best performing major asset this month, with Bitcoin (BTC, -0.55%) ranking second with a nearly 15% increase.
Demand for Ethereum surged earlier this month in anticipation of Ethereum Improvement Proposal (EIP) 1559, which was implemented on August 5 and will remove a significant number of tokens from circulation.

The amount of Ethereum destroyed is now directly tied to network usage, as the EIP destroys a portion of the fees paid to miners.
According to data source Etherchain, a total of 146,626.2 ETH has been destroyed since activation, representing 40% of new issuance. Recently, Ethereum's daily issuance, or the number of coins mined, fell below Bitcoin's level, indicating that Ethereum has less upward resistance.
However, since mid-August, Ether's rise has stalled, with prices stuck between $3,000 and $3,400. According to Matthew Dibb, co-founder and COO of Stack Funds, traders have been attracted to NFTs. In addition, funds have been flowing into so-called Ethereum alternatives such as Solana, Cardano, Cosmos, and Avalanche.

Ethereum’s Bollinger Bands, which are volatility bands placed two standard deviations above and below the 20-day moving average (MA) of price, are shrinking due to the ongoing price squeeze.
The Bollinger Bandwidth, calculated by dividing the spread between the bands by the 20-day MA, has fallen to 0.12, the lowest since October 2020. Long periods of low-volatility consolidation tend to end with big moves.
A bullish breakout looks likely as blockchain analytics firm IntoTheBlock foresees a supply crisis for Ethereum. “Over 781,000 ETH was withdrawn from exchanges in August alone. This combined with the amount of ETH deposited in 2.0 contracts + the amount locked in DeFi (~9.7 million) + the growing burn rate driven by NFTs could drive a liquidity crisis for ETH,” IntoTheBlock said in a Telegram-based market insights group.
According to Stack’s Dibb, “While the network’s gas fees are at all-time highs, a confirmed close (UTC) above the $3,400 range could pave the way for significant gains for ETH.” Gas fees refer to the fees paid for the successful execution of a transaction or contract on Ethereum.
Joel Kruger, currency strategist at LMAX Digital, also mentioned that price as a level for bulls to beat. “We need to keep an eye on $3,400 and see if we can get a daily close above that,” Kruger told CoinDesk in a Telegram chat.
Katie Stockton, founder and managing partner of Fairlead Strategies, expects a breakout as the intermediate- and long-term trends are positive. “The rising 50-day (~10-week) MA, currently around $2,707, has now acted as initial support for Ethereum, but we believe short-term overbought conditions are likely to be absorbed without a pullback of this magnitude,” Stockton said in a weekly research note published on Monday, referring to the moving average.
Recent options market flows also suggest that investors are positioning for a breakout of the range. “Option implied volatility has declined significantly from previous highs; however, we are seeing renewed interest in Ethereum call options for September and December expiration,” Stack Funds’ Dibb told CoinDesk in a WhatsApp chat.
A call option gives the buyer the right, but not the obligation, to buy the underlying asset at a predetermined price on or before a specific date. (CoinDesk)