Ethereum has been attempting a recovery lately. Here’s what on-chain data suggests about the sustainability of this rally.
Ethereum Network Growth And Utility Have Both Gone Up Recently
According to data from the on-chain analytics firm Santiment, the ETH blockchain has shown a positive trend in Daily Active Addresses and Network Growth recently. These metrics are used to track the utility and growth of the chain.
The “Daily Active Addresses” measures the unique number of addresses participating in transaction activity on the blockchain every day.
This number of addresses is similar to the number of users on the network, so the indicator’s value can provide insights into the strength of Ethereum’s current traffic.
The other indicator, “Network Growth,” indicates the daily number of addresses making a transaction on the blockchain for the first time.
Generally, new addresses represent new investors entering the cryptocurrency, so Network Growth can provide insights into the asset’s adoption rate.
Here is a chart showing the trend in Ethereum Daily Active Addresses and Network Growth over the last few months.
From the graph, it’s clear that both the Daily Active Addresses and Network Growth have been steadily increasing for Ethereum. The chain is now observing 101,000 new addresses appearing daily and 484,000 unique addresses making transactions per day.
This suggests that the cryptocurrency is not only experiencing significant interest from existing users, but also from new investors. Santiment notes, “Increased utility is a primary pillar to justify an increasing ETH market cap.”
Another analytics firm, Glassnode, has discussed the activity on the Bitcoin blockchain in its latest weekly report. Here is the chart shared by Glassnode showing the trend in the 7-day moving average (MA) number of active entities for Bitcoin:
This metric tracks “active entities” rather than addresses. An entity refers to a group of addresses deemed to belong to the same investor by Glassnode.
As seen from the chart, active entities for Bitcoin have recently hit cyclical lows, unlike Ethereum’s rise in utility.
The analytics firm explains, “at face value, this might suggest that despite the significant price appreciation, growth in Bitcoin users has not followed suit.”
“This is largely a result of the uptick in activity related to Ordinals and Inscriptions, where many participants are re-using Bitcoin addresses, and reducing the number of measured ‘active entities’ (does not double count).”
ETH Price
Ethereum has been making an effort at recovery recently, but the coin has seen a drop in the past day, bringing the price down to around $2,300. Despite this, considering the strong network activity, the rally may still have hopes of continuing.
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