Top three altcoins with highest weekly network growth: Ethereum, Ethereum Name Services and Threshold

• Altcoins have separated in two groups as the market gets polarized in the ongoing altcoin season. 
• Ethereum, ENS and T’s network growth increased while Enjin Coin, Basic Attention Token and ApeCoin’s growth declined. 
• Rising network growth is considered a driving factor for crypto prices while Bitcoin price action is curtailed below $43,000. 

Altcoins have separated from one another and two groups have emerged. The altcoins are divided on the basis of an on-chain metric, Network Growth, that tracks the amount of new addresses that transferred the asset for the first time. This metric tracks user adoption over time and can be used to identify whether a project is gaining or losing traction among market participants. 

Also read: Bitcoin records largest transaction of 2024, $665.3 million BTC transferred on Tuesday

Altcoins note spike in Network Growth, bullish sign for price

Network Growth is considered a key on-chain metric that offers insight into the relevance of an asset and can be used to identify whether the asset’s price trend is likely to sustain in the short-term. 

On the basis of Network Growth, the top three and bottom three altcoins ranked for the past three weeks are as follows:

Top Three: 

Ethereum (ETH) +6%

Ethereum Name Service (ENS) +124%

Threshold (T) +195%

Bottom Three:

ApeCoin (APE) -23%

Enjin Coin (ENJ) -32%

Basic Attention Token (BAT) -42%

The top three cryptocurrencies are likely to see sustained price growth in the short term as the Network Growth metric supports their recent gains. Likewise the bottom three are either considered as assets in the “buy zone” or “opportunity” to offer gains post their correction.

In the ongoing altcoin season, the polarization in altcoins has divided them in these categories and experts on X (formerly Twitter) are bullish on Ether and ENS in the short-term. 

Ethereum price has the potential to rally higher

In the past 24 hours, $13.8 million in Ethereum’s long positions were liquidated, as opposed to $3.3 million in short positions, according to Coinalyze data. Pseudonymous crypto analyst MAC_D shared their views on Ethereum’s liquidations and price potential on CryptoQuant. According to MAC_D, if a large number of long positions are liquidated it causes volatility to slide lower and the market sentiment then has a potential for a sharp shift. 

Since the beginning of 2023, there have been six major buying points and the second largest liquidation of long positions occurred on January 12, following the BTC Spot ETF approval. The liquidation of large futures positions creates a long-tailed candlesticks (spotted with black arrows) as seen in the chart below and this signals there was a strong influx of capital from whales during the liquidation event. 

Long and short liquidations and ETH price. Source: CryptoQuant

When price reaches the low end of the long-tailed candlestick, the market exhibits an extreme sentiment and there is potential for a bounce in Ethereum price. At the time of writing, Ethereum price is $2,519 on Binance.