In a significant development, Ethereum’s price has soared past $1,800, with signs pointing towards a potential breach of the $2,000 mark, driven by a considerable increase in network activity. This price surge correlates directly with a record-setting day in new Ethereum address creations since October 7, totaling 38,462 addresses. Suggesting a growing interest and participation in the Ethereum network, the surging network activity indicates new user or institutional adoption.
📈 #Ethereum‘s rise above $1,800 has been aided by its largest day of new addresses created since October 7th. If the long-term trend of network growth continues, and exchange supplies continue to drop, $ETH has justification to cross $2,000 once again. https://t.co/SWAC3BVzz8 pic.twitter.com/xRjYUfpkyO
— Santiment (@santimentfeed) November 1, 2023
Moreover, there is a notable contraction in the supply of Ethereum across exchanges, now standing at a mere 8.37% of the total supply. This level has not been seen since Ethereum’s initial trading week in 2015. Consequently, this drop in exchange supply can be attributed to various factors.
Many investors are likely moving their Ethereum holdings off exchanges, opting to store them for the long term in anticipation of future value appreciation. Additionally, the decentralized finance (DeFi) sphere and Ethereum 2.0 staking opportunities present attractive alternatives for users to lock their Ethereum in intelligent contracts, bypassing exchanges altogether.
Furthermore, the reduced presence of Ethereum on exchanges may lead to diminished selling pressure. This development, if coupled with sustained or increased demand, holds the potential to propel Ethereum’s price even further. On October 31, 2023, Ethereum exhibited relatively low price volatility, hovering between $1,794.42 and $1,828.78, eventually closing at $1,799.91.
However, the network’s increased activity and decreased exchange supply are vital indicators of Ethereum’s market sentiment and potential price movement. The graph analysis by Santiment underscores these trends, correlating network growth and price movements. Although not always directly aligned, these spikes in network activity do influence Ethereum’s market behavior. As of the last update, Ethereum is $1,851.42, marking a 2.38% increase within 24 hours.
This flurry of activity and positive indicators within the Ethereum network certainly paint an optimistic picture. However, it is crucial to approach these developments with a critical eye, employing a diverse range of sources and analytical methods before making any investment decisions. In this volatile crypto landscape, an informed and cautious approach remains paramount.
