- The Ethereum network saw a 28% increase in daily address creation.
- Rising spot prices failed to move the derivatives market.
Ethereum [ETH] has rebounded well since the Jan. 22 crash when the second-largest asset lost 10% of its value.
The second largest asset registered a steady growth of 4.74% over the past week, AMBCrypto found using CoinMarketCap data.
During the uptrend, ETH also scaled up to $2,380. However, profit taking on weak hands has caused ETH to fall to $2,339 at the time of writing.
Ethereum has high network usage
The price increase coincided with rapid growth in on-chain activity. According to on-chain analytics firm Santiment, an average of 484,000 unique addresses were exchanged with the network last week.
We also expected the network to grow. Approximately 101,000 new addresses were being created on the network every day. In fact, new addresses are being created 28% faster per day compared to three months ago.
The number of transactions, another key indicator of strong network activity, jumped 10% over the week.
Analyzing these metrics reveals that ETH’s market capitalization expansion is built on the foundation of increasing network utility.
Is it a bullish signal for ETH in the long term?
Over the years, a lot of criticism has been leveled at projects where the market value of their tokens increased without anything happening on the network. A classic example is meme coins.
In the case of Ethereum, the ratio of network valuation to trading volume has been steadily declining in recent months, indicating that the asset is undervalued.
This is interpreted as a bullish signal as it means the asset has high growth potential. Notice how the price of ETH turned into a strong upward trend while the ratio was decreasing.
What do you expect next?
Rising spot prices failed to move the derivatives market. According to an analysis of Coinglass data by AMBCrypto, ETH open interest (OI) at the time of writing was down 5.2% compared to a week ago.
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However, the situation could change soon, as market sentiment has shifted from neutral to greedy over the past two days, according to analysis of AMBCrypto’s Hyblock Capital data.
FOMO could ultimately lead to further ETH purchases in the coming days.