- Ethereum network observes a 31% uptick in the number of unique addresses interacting on its blockchain.
- Amidst a surge in on-chain activity, ETH posted over 5% daily gains on Thursday.
- Nearly $27.3 billion worth of ETH is pulled out of circulation and staked in the ETH2 deposit contract.
- With over $1.1 billion worth of Ether burned, analysts expect a "deflationary effect" on the altcoin's price.
The Ethereum reserve on exchanges has plummeted to a three-year low, and the altcoin is gearing up for a breakout.
Ethereum on-chain activity witnesses massive spike, is ready to skyrocket
The second-largest cryptocurrency has witnessed one of the biggest spikes in address activity since July 2021. Active addresses are an indicator of the number of unique addresses sending or receiving Ether. Historically, a spike in this indicator is indicative of a bullish breakout in Ethereum price.
Over the past five days, there has been a 31% increase in the number of unique addresses interacting on the Ethereum network based on data from Santiment, a behavioral analytics platform. This implies that Ethereum is primed for another leg up in the ongoing rally.
Ethereum active addresses for the past 30 days.
Rising on-chain activity is driving the altcoin's price higher. Ethereum has posted 5% daily gains and is trading at $3,604.25 at the time of writing.
The brewing Ethereum supply shock is fueling the narrative of an upcoming bull run. Since the implementation of EIP-1559, nearly 303,000 Ether worth over $1.1 billion has been burned and subsequently pulled out of the circulating supply.
The volume of Ethereum staked in the ETH2 deposit contract is the only other critical factor influencing the altcoin's circulating supply.
Over 7.57 million Ether has been staked in the deposit contract. The combined volume of Ethereum burned and staked is on the rise, effectively reducing the quantity of the altcoin in circulation and bringing about a supply shock.
Quantity of Ethereum staked in ETH2 deposit contract.
Pseudonymous cryptocurrency analyst and trader @Pentosh1 believes that it is time for Ethereum to break out. Another 80% reduction in issuance of Ether is expected after its transition to proof-of-stake, widely referred to as "The Merge."
Over $1,000,000,000 in $eth burned since EIP went live. A 54% reduction in issuance. Have you seen what happens 2 months after $BTC halvings?
— Pent◎shi Wont DM You (@Pentosh1) September 15, 2021
And don’t let me remind you. Eth has another 80% reduction in issuance coming from the merge. It’s simply undervalued https://t.co/H15x15nEUG
FXStreet analysts have evaluated the current Ethereum price action and state that it presents a clean and profitable trade.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.