- The Ethereum network saw a 28% jump in daily address creation.
- The increase in spot prices failed to move the derivatives market.
Ethereum [ETH] has recovered well since the steep fall on January 22, with the second largest asset losing 10% of its value.
The second-largest asset posted a steady 4.74% growth last week, AMBCrypto found using CoinMarketCap data.
During the uptrend, ETH also rose to $2,380. However, profit-taking by weak hands sent ETH down to $2,339 at the time of writing.
Source: CoinMarketCap
Ethereum is seeing high network usage
The price increases were accompanied by sharp growth in on-chain activity. According to on-chain analytics firm Santiment, an average of 484,000 unique addresses interacted with the network in the past week.
Network growth was also promising. About 101,000 new addresses were created on the network every day. In fact, the daily number of new addresses was 28% faster than three months ago.
Source: Santiment
Another key indicator of strong network activity – the number of transactions – spiked 10% this week.
When analyzing these statistics, it became clear that ETH’s growing market capitalization was built on the foundations of increasing network utility.
Source: Santiment
A bullish signal for ETH in the long term?
Over the years, a lot of criticism has been directed at projects that saw the market value of their tokens rise without much happening on their networks. A classic example could be that of meme coins.
In the case of Ethereum, the ratio of network valuation to transaction volume has steadily declined in recent months, indicating an undervalued asset.
This is interpreted as a bullish signal because it means that the asset has high growth potential. Notice how the price of ETH started a strong uptrend while the ratio fell.
Source: Santiment
What can you expect next?
The increase in spot prices failed to move the derivatives market. According to AMBCrypto’s analysis of Coinglass data, ETH’s Open Interest (OI) at the time of writing was 5.2% lower than a week ago.
Source: Coinglass
Is your portfolio green? Check out the ETH profit calculator
However, according to AMBCrypto’s analysis of Hyblock Capital data, things could change quite quickly as market sentiment has shifted from neutral to greedy over the past two days.
The FOMO could ultimately lead to more ETH purchases in the coming days.
Source: Hyblock Capital