Ethereum’s network activity sees a turnaround: Here’s how
Ethereum has experienced a surge in network utilization, coinciding with the recent price gains. On-chain analytics firm Santiment reports that an average of 484,000 unique addresses interacted with the network in the last week. Furthermore, the network saw significant growth, with 101,000 new addresses being created daily — a 28% increase compared to three months ago. The number of transactions also spiked by 10% over the week. These metrics indicate that Ethereum’s growing market capitalization is based on its increasing network utility.
This upturn in network activity can also be viewed as a positive long-term signal for Ethereum. Many projects have faced criticism in the past for an increase in token value without corresponding network activity. By contrast, Ethereum’s network valuation-to-transaction volume ratio has consistently decreased in recent months, indicating an undervalued asset with significant growth potential. Notably, ETH’s price has seen a strong uptrend during this time period.
Looking ahead, the recent increase in spot prices has yet to impact the derivatives market. ETH’s Open Interest (OI) currently stands 5.2% lower than it did a week ago. However, market sentiment has shifted from neutral to greed in the last two days, indicating a potential increase in FOMO (fear of missing out) that could drive more buying of ETH in the coming days.
Analyst comment
Positive news. The high network utilization and increased on-chain activity indicate growing market utility for Ethereum. The decreasing ratio of network valuation to transaction volume suggests an undervalued asset with potential for growth. Market sentiment shifting to greed could lead to increased buying of ETH in the near future.
