Much like its peers, Ethereum has started the year on a positive note, experiencing a 46% increase since January 2023 after losing 66% of its market value during the latest crypto winter. Obviously, Ethereum wasn’t the only victim that suffered a massive decline in 2022, but as the second largest crypto by market cap after Bitcoin and the leader of altcoins, the network’s downfall was much more resounding than that of smaller crypto assets.
The bullish trend that Ethereum has been displaying for the past few months caused ETH prices to move from $1,200 to $2,000 in the first half of 2023, as shown on exchange platforms like Binance. The token even registered a brief spike in price, breaking above the $2,000 mark in early May. At the time of writing, Ethereum was trading for $1,854. So, it’s safe to say that things have been going well for Ethereum lately given the circumstances. However, the coin is still well below its all-time high of $4,891 registered in November 2021 and volatility remains a major issue. This raises concerns over Ethereum’s ability to sustain this bullish momentum and the possibility of further growth.
Network indicators provide reasons for optimism
As usual, it’s difficult if not impossible to say what might happen to Ethereum or any other crypto in the near or distant future. However, there are certain markers that can help us gain a bit of clarity on Ethereum’s potential trajectory for the weeks to come.
Data provided by the on-chain analytics platform Santiment reveals there has been a notable improvement in two key indicators for the network, namely daily active addresses and network growth. The daily active addresses metric monitors the number of addresses that conduct transactions on the Ethereum network daily, while the network growth metric reveals how many newly-created addresses emerge on a daily basis. The first provides information about active users, regardless if they’re old or new, and the second focuses entirely on the activity of newcomers to the network.
Keeping track of users’ activity offers valuable insight into the network’s appeal and performance. As the on-chain data shows, there’s been a significant increase in both metrics at the end of July, which can be interpreted as a positive sign for Ethereum in the month of August. The number of daily active addresses has risen to 450,000 – the highest value in two weeks for this metric – which indicates increased activity on the network. This also suggests that traders’ and investors’ interest in Ethereum is growing. When network activity increases, volatility also tends to spike, so things can go both ways for Ethereum.
At the same time, Ethereum has also seen a surge in new addresses as new users enter the network. The network growth metric has recently reached a rate of 80,000, proving that Ethereum hasn’t lost its appeal to traders and investors. In fact, as one of the most established crypto platforms in the market, Ethereum is constantly attracting newcomers to its ranks. Since network growth is closely linked to user base growth, these developments point out that Ethereum is poised for further expansion and potential price appreciation.
Another interesting finding in Santiment’s charts draws a comparison between the Ethereum and Bitcoin prices. According to the analysis, when Ethereum was rallying aggressively against Bitcoin and even outperformed the king of crypto briefly, the two metrics mentioned above showed similar levels to the ones they’re displaying currently. Therefore, if history were to repeat itself, Ethereum might be on the brink of a new price rally that could have the token compete once again against the top crypto.
Ethereum in the long run
While Ethereum’s prospects for August seem to be optimistic, in the world of crypto what happens in the long run is much more important than short-term accomplishments. It’s also a lot more difficult to predict or make assumptions about the long-term evolution of a crypto asset, whether we’re talking about an already established crypto like Ethereum or a newly-developed and promising project that has just picked up pace. However, it’s important to keep our eyes on the future and try to focus on upcoming developments.
Ethereum has recently celebrated its eighth birthday, so a lot of people are wondering and pondering about what the next eight years might bring for the network. Since there’s no magic crystal ball that can provide answers, we need to turn to reliable sources for responses. When it comes to Ethereum, the most dependable information source is represented by the Ethereum Foundation, a non-profit organization dedicated to supporting Ethereum and related technologies. in other words, although the Ethereum Foundation doesn’t act like a central governing authority, it is responsible for much of the development that the network has experienced over the years and continues to play an important role in its trajectory.
According to the Ethereum Foundation, the team of developers and researchers that work behind the scenes to improve the network have been focusing on four key aspects for Ethereum’s future: reducing transaction fees, enhancing security, improving user experience and boosting the platform’s sustainability levels. These goals are included in the Ethereum Roadmap which outlines the upgrades and updates that the network will undergo in the near and distant future.
Ethereum developers have already thought of several strategies such as Proto-Danksharding, layer 2 solutions, or refining the Ethereum Virtual Machine (EVM) to address the issues mentioned above and plans are underway to implement these solutions, so it seems like there are busy times ahead for the network which gives Ethereum supporters and the community as a whole more reasons for excitement.
Ethereum has always been a very interesting project to follow due to its innovative and forward-thinking nature and recent developments prove that the network continues to be one of the top players in the industry. With key indicators suggesting a positive evolution for Ethereum in the following weeks, it’s worth keeping an eye on this promising crypto.