"Revenues for the Ethereum ecosystem are bottoming out from depressed levels; this could signal a tradeable bottom for ETH," said Thielen.
Ethereum's weekly revenue – which is the income from the network's transaction fees, also known as gas – recently rose above $30 million for two consecutive weeks, up from a yearly low of $12 million hit in early October, Token Terminal data shows.
"A tactical bullish trade could have merit for as long as weekly Ethereum fees stay above $30 million," Thielen added, setting a $3,000 price target based on technical chart patterns.
Alongside a major rally for bitcoin and the rest of the crypto market since, ETH has bounced roughly 20%, recently changing hands at $1,870.
Ether (ETH) turns deflationary
The network settled $250 billion of asset transfers last week, the most in value since the mid-March regional banking crisis and up from $105 billion in late August, per IntoTheBlock data.
The rising on-chain activity signals that fundamentals of the crypto market are improving, according to Lucas Outumuro, research head at IntoTheBlock.
"Improving on-chain activity and growing spot-driven inflows point to strong demand driving crypto's rally," Outumuro said.
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