- The Ethereum network saw a 28% increase in daily address creation.
- The rise in spot prices did not move the derivatives market.
Ethereum (ETH) has recovered well following a sharp decline on January 22 that saw the second-largest asset lose 10% in value.
The second-largest asset has recorded steady growth of 4.74% over the past week, AMBCrypto found using CoinMarketCap data.
During the upward trend, ETH also rose to $2,380. However, profit taking by weak hands has pushed ETH down to $2,339 at the time of writing.
Source: CoinMarketCap
Ethereum shows high network utilization
The price rise was accompanied by rapid growth in on-chain activity. According to on-chain analytics firm Santiment, an average of 484,000 unique addresses interacted with the network last week.
Network growth was also promising. Approximately 101,000 new addresses are created on the network every day. In fact, the daily rate of new address creation is 28% faster than it was three months ago.
Source: Santiment
The number of transactions, another important indicator of strong network activity, surged 10% over the week.
Analyzing these metrics, it becomes clear that ETH’s market capitalization growth has been built on increasing network utility.
Source: Santiment
What are the bullish signals for ETH in the long term?
Over the years, there has been a lot of criticism of projects where the market value of their tokens has increased without much happening on the network. A classic example might be a meme coin.
In the case of Ethereum, the ratio of network valuation to transaction volume has steadily declined in recent months, which is a sign that the asset value is undervalued.
This is interpreted as a bullish signal as it means the asset has high growth potential. Notice how the price of ETH started a strong upward trend while the rate was falling.
Source: Santiment
What do you expect next?
Rising spot prices failed to move the derivatives market. At press time, ETH’s open interest (OI) was 5.2% lower than a week ago, according to AMBCrypto’s analysis of Coinglass data.
Source: Coinglass
Is your portfolio green? Check out our ETH Profit Calculator
However, that could soon change, with market sentiment shifting from neutral to greedy over the past two days, according to AMBCrypto’s analysis of Hyblock Capital data.
FOMO could ultimately lead to more ETH purchases in the future.
Source: Hiblock Capital