Ethereum’s network has seen notable growth recently in both daily active users and daily transaction volume, yet the price of ETH, Ethereum’s native cryptocurrency, has undergone corrections in the past few days. Notably, Ethereum is down by over 10% in the past seven days, underperforming Bitcoin and the S&P 500.
While this decline can be felt through the majority of large cryptocurrencies in the industry, the number of daily active Ethereum addresses has been steadily rising over the past month.
Ethereum’s Network Activity Surges But Price Remains Stagnant
An increase in network activity is usually a bullish sign for the price of cryptocurrencies as more activity means more demand. Interestingly, the number of daily active Ethereum addresses has increased by over 46% since January 3.
This increase in active addresses largely came with a surge in price over the past few months. Ethereum shot up from $2,909 on February 24 to reach a two-year high of over $4,000 on March 12, representing a surge of over 39%. According to data from YCharts, the number of daily active addresses increased simultaneously from 432,647 to 515,145 during the same time frame.
However, Ethereum has been on a price decline since its brief cross over $4,000 and is currently down by 17% in the past 10 days. On the other hand, the network has witnessed a continued surge in activity in terms of on-chain data, with the number of daily active addresses now at 618407 in the past 24 hours, its highest point since October 2023.
According to data from IntoTheBlock, ETH’s daily average volume has been steadily growing in a similar manner to the one recorded in 2020’s early bull market. This growth has now pushed the amount of ETH transferred on Ethereum to its highest level since May 2022 this week.
Ethereum is now trading at $3,420. Chart: TradingView
Can Ethereum Resume Its Uptrend?
At the time of writing, Ethereum is trading at $3,355. The price of any cryptocurrency, including ETH, depends heavily on market sentiment and speculation. While growing adoption and network activity are positive signs for long-term price growth, speculation is what really drives the price, at least in the short term.
At the same time, its price remains under pressure from several areas. One of such pressures is a recent report that the SEC is poking around Ethereum and the Ethereum Foundation and is looking to classify ETH as a security.
As the second-largest cryptocurrency, ETH’s classification as a security could cause chaos that would eventually cascade into other crypto assets.
Ethereum seems to have now formed a minor support at the $3,280 price level. Failure to hold above this price point could mean a further move to the downside.
Featured image from Pexels, chart from TradingView
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Author: Scott Matherson
