On-chain metrics indicate that the adoption rate of Ethereum has reached a four-month peak, which may bode well for the cryptocurrency’s price performance.
Recent Surge in Ethereum Network Growth
Data from the on-chain analytics firm Santiment reveals a significant increase in the number of wallets created on the ETH blockchain. The key metric here is “Network Growth,” which tracks the daily emergence of new addresses on the network.
An address is recognized as being utilized when it completes its first transaction on the blockchain. The Network Growth metric tallies the number of such addresses that are becoming active for the first time each day.
A high value for this metric indicates that users have recently established numerous new addresses on the network. This trend can result from new investors entering the market or previous investors returning after a hiatus.
Moreover, existing users may create new addresses to enhance their privacy. Generally, when this metric spikes, it suggests that some level of adoption is occurring across the network.
Conversely, a low value suggests that few new addresses are being created, which could signal a decline in interest in cryptocurrency.
Below is a chart illustrating the trend in Ethereum Network Growth over the past few months:
As evidenced by the chart above, Ethereum Network Growth experienced a significant spike yesterday, with 126,210 new addresses emerging on the blockchain within a 24-hour period.
This figure represents the highest level recorded in over four months, indicating that the asset is drawing an impressive number of new users.
Overall, increased adoption is seen as positive for any asset in the long run, as a larger user base can create a more robust foundation for future price fluctuations. However, in the short term, sudden increases in Network Growth can cause the coin’s price to fluctuate in either direction.
The chart illustrates that previous spikes in this indicator correlated with local price peaks in August. These spikes often signaled FOMO during price increases, and excessive hype typically has an adverse effect on an asset, which may explain the occurrences of price peaks.
This time, however, the rise in Network Growth has coincided with a decline in Ethereum’s price. This growing interest amidst a downturn could potentially catalyze a price recovery.
Current ETH Price
Ethereum has faced challenges lately, with its price currently hovering below the $2,280 level.
Dutch
English
French
German
Greek
Italian
Portuguese
Russian
Spanish