Levels of activity on Ethereum have peaked to their highest in two years, going by one metric.
Active addresses are the number of unique addresses that are active in the network either as a sender or receiver. Glassnode takes into account only those addresses that were active in successful transactions.
As of Monday, the seven-day average was down slightly to 390,162. That’s still 115% growth from the low of 180,750 seen on Jan. 30.
The increased ether activity could be associated with the explosive growth of Ethereum-based decentralized finance (DeFi) platforms, as well as the number of daily tether (USDT) transactions on the network.
The heightened demand for ether from such use cases is expected by many to fuel a major bull run. So far, however, the cryptocurrency has struggled to decouple from bitcoin, the leading cryptocurrency by market value.
Ether, the second-largest cryptocurrency, is moving pretty much in tandem with bitcoin. The ether-bitcoin one-year correlation has risen to 89%, the highest on record, according to crypto derivatives research firm Skew.
Some observers would argue that address growth is not a reliable indicator of adoption, as a single user can own multiple addresses. Crypto exchanges also store coins belonging to traders in multiple addresses.
While that's true, ether’s active addresses metric is more reliable compared to that of bitcoin. “Active addresses are inflated on bitcoin because of the UTXO model,” tweeted to Anthony Sassano, SetProtocol product marketing manager and co-founder of EthHub, an open-source initiative founded by the Ethereum community.
UTXO stands for unspent transaction output. Under the UTXO model, bitcoin users have to use new addresses with each transaction. Meanwhile, Ethereum uses an accounts model, under which addresses get reused, as noted by Sassano.
Bitcoin’s daily active addresses recently rose to the highest level since December 2017, suggesting scope for a price rally to $12,000, according to Bloomberg analysts.
At press time, bitcoin is changing hands at $9,270, representing a 0.8% drop on the day and ether is trading at $238, down 1.7%, according to CoinDesk data.
Ether jumped 6% on Monday to print its biggest single-day gain since June 22. However, a trendline falling from June 2 and June 24 highs is still intact.
If network activity is a guide, the cryptocurrency could soon breach the trendline resistance, currently at $246. That would signal a continuation of the rally from March lows below $100 and expose $289 (Feb. 15 high).
Disclosure: The author holds no cryptocurrency assets at the time of writing.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.