In recent times, Ethereum’s network has witnessed significant growth in terms of daily active users and daily transaction volume. Despite this surge in network activity, the price of ETH, Ethereum’s native cryptocurrency, has experienced corrections over the past few days. It is interesting to note that Ethereum has seen a decline of over 10% in the past seven days, lagging behind Bitcoin and the S&P 500. This downward trend is not confined to Ethereum alone, as many large cryptocurrencies in the industry have been experiencing a similar decline in price. However, one positive indicator amidst this price correction is the steady rise in the number of daily active Ethereum addresses over the past month.
An increase in network activity is generally considered a bullish sign for the price of cryptocurrencies, as higher activity levels indicate greater demand. The number of daily active Ethereum addresses has surged by over 46% since January 3, which correlates with the rise in price that Ethereum experienced in the previous months. For instance, Ethereum saw a significant price surge from $2,909 on February 24 to a two-year high of over $4,000 on March 12, representing a remarkable increase of over 39%. Coinciding with this price surge, the number of daily active addresses also witnessed a substantial increase from 432,647 to 515,145 during the same period.
Despite the price decline that Ethereum has been experiencing since its peak above $4,000, the network continues to observe a surge in on-chain data activity. The number of daily active addresses has now reached 618,407 in the past 24 hours, marking its highest level since October 2023. Additionally, data from IntoTheBlock reveals that ETH’s daily average volume has been steadily growing, resembling the trend seen during the early bull market in 2020. This growth has propelled the amount of ETH transferred on the Ethereum network to its highest level since May 2022 this week. As of the current writing, Ethereum is trading at $3,355, slightly below its recent high.
The price of Ethereum, like any other cryptocurrency, is heavily influenced by market sentiment and speculation. While factors such as growing adoption and network activity serve as positive indicators for long-term price growth, speculation often drives short-term price movements. However, Ethereum faces pressure from various sources, including recent reports suggesting that the SEC is investigating Ethereum and the Ethereum Foundation with the intention of classifying ETH as a security. This regulatory uncertainty could potentially disrupt the cryptocurrency market as a whole, impacting not only Ethereum but other digital assets as well.
As Ethereum hovers around the $3,355 mark, it appears to have formed a minor support level at $3,280. A failure to maintain this support level could potentially lead to further downside movement in price. Traders and investors must remain cautious and monitor market developments closely to assess the impact of regulatory actions and market sentiment on Ethereum’s price trajectory. While network activity remains robust, external factors such as regulatory scrutiny and market volatility continue to pose challenges for the future price outlook of Ethereum and other cryptocurrencies.