Ethereum, the second-largest blockchain by market capitalization, has recently seen an increase in its on-chain activity, according to a report by market intelligence platform Santiment. On September 13, the count of daily active Ether addresses reached approximately 1,089,893, marking the second-highest number ever recorded in Ethereum’s history. The highest count was observed on December 9, 2022, following Ether’s losses from the post-2021 bear market.
This surge in on-chain activity suggests a growing demand for Ethereum and indicates the potential for increased volatility in the market. Analysts at Santiment believe that this uptick in activity could lead to a recovery in the Ether market. It also signifies the continued interest of institutional investors in Ethereum, as evidenced by the growing interest in spot ETFs.
Despite the recent price decline that pushed Ethereum below the $1.7k threshold, the cryptocurrency remains a key player in the decentralized finance (DeFi) ecosystem and smart contract arena. It currently holds around $20 billion in total value locked (TVL), highlighting its importance in the blockchain industry. Additionally, the Ethereum network plays a central role in numerous other blockchains due to its EVM network.
The prospects for the Ethereum network seem optimistic, supported by its significant valuation, liquidity, and strong trading activity. However, it’s important to note that Ethereum’s price movement is still significantly influenced by Bitcoin, despite its unique fundamentals as a prominent altcoin. Historically, the month of September, particularly before a halving event, has been associated with bearish sentiment in the cryptocurrency market.
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As a result, there is a possibility that Ethereum’s price will continue to decline in the coming weeks, potentially approaching the next support level at around $1.5k. The cryptocurrency is currently facing substantial selling pressure, as indicated by the formation of both weekly and daily death crosses between the 50 and 200 Moving Averages (MA).
Nevertheless, many experts believe that Ethereum is undervalued and has the potential to grow even stronger in the future. Its dominance in the DeFi space, along with its continuous development and upgrades, position it well for long-term success. As the blockchain industry continues to evolve, Ethereum’s role is expected to expand further, attracting more users and investors.
In conclusion, the recent increase in Ethereum’s on-chain activity signals a growing demand for the cryptocurrency and suggests the potential for a market recovery. Despite the immediate market instability and price decline, Ethereum remains an attractive option for institutional investors and continues to play a crucial role in the blockchain industry. While short-term price movements may be influenced by external factors such as Bitcoin, the long-term prospects for Ethereum remain promising, driven by its technological advancements and position in the DeFi ecosystem.
