Weekend Lull Sees ETH Price Break Above $1,250

·

The cryptocurrency market experienced a relatively quiet weekend, but amid the calm, Ethereum (ETH) managed to break above the $1,250 mark—a modest yet meaningful milestone amid broader digital asset volatility. While headlines were dominated by liquidity concerns surrounding FTX earlier in the week, ETH demonstrated resilience, reclaiming key technical levels and reinforcing its position as a foundational asset in the blockchain ecosystem.

Despite pulling back from earlier highs near $1,490 and failing to sustain momentum above $1,600, Ethereum remains within striking distance of critical resistance zones. As of Sunday morning data, the ETH/USD pair was trading approximately 16% below its previous peak. Nevertheless, the underlying fundamentals continue to support a bullish thesis for both short-term traders and long-term investors.

Ethereum Outperforms Bitcoin and Traditional Markets

According to a recent report released by CryptoCompare on November 18, Ethereum significantly outpaced other major assets in October, posting an impressive 11.4% monthly gain—nearly double the 5.49% rise seen in Bitcoin during the same period. This performance underscores ETH’s growing appeal not only among crypto-native investors but also within diversified portfolios.

👉 Discover how market leaders are positioning for the next breakout

More notably, Ethereum also outperformed leading equity indices such as the S&P 500 and Nasdaq Composite, which struggled with macroeconomic headwinds including rising interest rates and inflation fears. The outperformance is largely attributed to positive developments within the Ethereum ecosystem, particularly the successful activation of the Shanghai upgrade testnet, which has reignited excitement around future network enhancements.

These upgrades are expected to unlock new utility, improve scalability, and further solidify Ethereum’s role as the primary platform for decentralized finance (DeFi), non-fungible tokens (NFTs), and Web3 applications.

The Path to a Deflationary Supply Is Now Clear

One of Ethereum’s most compelling long-term narratives lies in its transition to a deflationary monetary policy following The Merge—the historic shift from proof-of-work (PoW) to proof-of-stake (PoS). Data shows that Ethereum is now on a sustainable path toward becoming a net deflationary asset, a rare trait in the digital asset space.

Before The Merge, Ethereum issued new tokens across two layers: the execution layer (mainnet) and consensus layer (Beacon Chain). Miners could earn up to 13,000 ETH per day under PoW, while stakers received around 1,700 ETH daily based on approximately 14 million staked tokens at the time. This resulted in an annual inflation rate of 4.09% (4.93 million ETH) from execution layer issuance and 0.52% (620,500 ETH) from consensus layer rewards.

Post-Merge, block production on the execution layer no longer generates miner rewards. Instead, new ETH issuance is determined solely by staking rewards minus the amount of ETH burned through EIP-1559, which burns transaction fees collected on the network.

This mechanism has flipped Ethereum’s economics: when network activity is high and fee burn exceeds new issuance, the total supply contracts. According to UltraSound.Money, over 5,700 ETH have been removed from circulation since The Merge—an insignificant figure relative to the total supply (~120 million), but symbolically powerful.

Crucially, EtherScan data confirms that Ethereum entered deflationary territory on May 9, when daily ETH burned reached 5,242 tokens—the first sustained period of supply contraction post-transition. At current rates, Ethereum’s annualized inflation stands at just -0.03%, making it one of the few digital assets with a shrinking supply.

Why Ethereum Sets the Benchmark for Staking Yields

Ethereum’s influence extends beyond price action—it's increasingly setting the standard for proof-of-stake economics. In a discussion published by Bloomberg Intelligence, strategists Mike McGlone and Jamie Douglas Coutts analyzed staking yields across top-tier PoS blockchains. They found that only Polkadot (DOT) and Cosmos (ATOM) delivered slightly higher net returns than Ethereum, with positive spreads of 0.77% and 0.10%, respectively.

However, Ethereum maintains dominance in two critical areas: fee revenue generation and monetary policy discipline. Its robust transaction volume ensures consistent fee income, much of which is burned, reinforcing scarcity. Meanwhile, its predictable issuance model—capped by validator participation and protocol rules—makes it a reliable benchmark for capital allocation decisions.

👉 See how top investors evaluate staking opportunities today

As McGlone noted, any asset offering a lower effective yield than Ethereum risks being perceived as mispriced or overvalued, especially if it lacks comparable utility or supply controls. To remain competitive, these networks may need to reduce emissions or enhance value accrual mechanisms—just as Ethereum did through The Merge and EIP-1559.

Frequently Asked Questions

Q: What caused ETH to break above $1,250 despite market calm?
A: Reduced selling pressure over the weekend, combined with renewed confidence in upcoming upgrades like Shanghai and steady network fundamentals, helped push ETH past $1,250.

Q: Is Ethereum truly deflationary now?
A: Yes—under current conditions where more ETH is burned via transaction fees than issued as staking rewards, Ethereum experiences net supply contraction. This makes it technically deflationary on a rolling basis.

Q: How does EIP-1559 contribute to Ethereum’s scarcity?
A: EIP-1559 introduced a base fee for transactions that is permanently destroyed (burned). When network usage is high, large amounts of ETH are removed from circulation, counterbalancing new issuance.

Q: What impact does The Merge have on staking returns?
A: The Merge shifted rewards from miners to validators. Annual staking yields currently average around 5%, adjusted for validator count and network security needs.

Q: Why do analysts consider ETH a benchmark for other PoS chains?
A: Due to its scale, security, developer activity, and sound monetary policy, Ethereum serves as a reference point for evaluating yield efficiency and long-term sustainability in the PoS ecosystem.

Q: Could future upgrades increase Ethereum’s deflationary pressure?
A: Yes—upgrades like full Danksharding and increased Layer-2 adoption could drive higher transaction volumes without increasing base fees proportionally, leading to greater burn rates and deeper deflation.

Final Outlook: Strength Beneath the Surface

While weekend trading often lacks volatility, Ethereum’s ability to reclaim $1,250 reflects underlying strength. With strong fundamentals—ranging from declining issuance, growing staking adoption, and ongoing ecosystem innovation—ETH remains well-positioned for long-term growth.

Core keywords naturally integrated throughout this article include:

As institutional and retail interest evolves, Ethereum continues to set the tone for blockchain-based value creation. Whether measured by technological progress, economic design, or market performance, ETH isn’t just keeping pace—it’s leading the way.

👉 Stay ahead of the curve with real-time ETH analytics and insights