Ethereum Reached Highest Activity Metric Level in 2 Years
The activity level of Ethereum (ETH) has hit its highest in two years, going by one metric.
Last Friday, the seven-day moving average of the number of active ether addresses increased to 405,014. According to the blockchain analytics firm, Glassnode, this is a threshold not seen since May 2018.
The active addresses are the number of unique addresses active in the network, whether they are a sender or receiver. But Glassnode only takes into account the ones that are active in successful transactions.
On Monday, the seven-day average slightly decreased to 390,162. But still, it grew by 115% from the low of 180,750 last January 30.
The surge of ether activity might be due to the explosive growth of Ethereum-based decentralized finance (DeFi) platforms and the number of daily tether (USDT) transactions on the network.
Recently, it locked around 3.1 million ether in different DeFi applications, based on data source defipulse.com. After this, the number of daily USDT (the most used stablecoin) transactions on ether has boosted by more than 400% this year.
Furthermore, many people already expect the increase in demand for ether from such use cases to trigger a major bull run. As of now, the cryptocurrency has struggled to decouple from Bitcoin (BTC) – the most famous crypto by market value.
More About Ether
Ether, being the second-largest cryptocurrency, is moving mostly in tandem with Bitcoin. According to crypto derivatives research firm Skew, the ether-bitcoin one-year correlation has climbed to its highest record, by 89%.
Several observers are arguing that address growth is not a reliable indicator of adoption. And this is because a single user can have multiple addresses. Also, crypto exchanges store coins belonging to traders in numerous addresses.
Even if that remains true, ether’s active addresses metric is more reliable than that of Bitcoin.
Anthony Sassano, SetProtocol product marketing manager and co-founder of EthHub, tweeted, “Active addresses are inflated on Bitcoin because of the UTXO model.”
EthHub is an open-source initiative, which the Ethereum community founded.
In addition to that, UTXO stands for unspent transaction output. In the UXTO model, bitcoin users need to use new addresses with every transaction made. Meanwhile, Ethereum uses an accounts model – where addresses get reused – as stated by Sassano.
The daily active addresses of Bitcoin recently surged to its highest level since December 2017. With that, it hints at a scope for a price rally as high as $12,000, based on Bloomberg analysts.
Currently, Bitcoin is shifting hands at $9,270, representing a 0.8% decline. On the other hand, ether is trading at $238, dipping 1.7%, according to CoinDesk data.
What’s Next
Ether boosted by 6% on Monday. Due to that, it printed its biggest single-day gain since June 22. But the trendline dropping from June 2 and June 24 highs is still intact.
Then, in the case that network activity is a good indicator, the crypto might soon breach the trendline resistance, which was recently at $246. Thus, this would suggest a continuation of the rally from the March lows under $100 and expose $289, the February 15 highs.
