Ethereum, the second-largest cryptocurrency, has witnessed a resurgence in price and network activity, with key indicators pointing towards a thriving ecosystem.
According to data from on-chain analytics firm Santiment, Ethereum’s surge earlier this week coincided with an impressive influx of 101,000 new ETH addresses daily and 484,000 unique addresses interacting on the Ethereum network daily. The firm also noted that network activity is now operating at a 28% faster pace than just three months ago, showcasing Ethereum’s remarkable rebound and growth.
Meanwhile, despite recent challenges, Ethereum’s value has continued to display strength, with price maintaining above the closely watched $2,200 demand zone. On Tuesday, the price surged as high as $2,387 but has since experienced a slight recoil amid a wider market pullback led by Bitcoin. Notably, the current price action of Ethereum exhibits a rebound, with the price now testing the top of an ascending triangle pattern after breaking out in late November.
That said, while profit-taking pressures might trigger a descent towards the demand zone with the cryptocurrency’s Fear and Greed index signalling “Extreme Greed”, a definitive break and closure below it could confirm a bearish trend, potentially driving the price towards the support level at $1,900. However, despite the possibility of short-term fluctuations, certain analysts maintain an ambitious target of $3,000 for ETH, citing the cryptocurrency’s enduring growth in network activity as a key factor in their optimistic outlook.
Furthermore, the upcoming Dencun upgrade scheduled for debut on the mainnet in March is emerging as a potential bullish catalyst for ETH. Dencun is Ethereum’s latest major hard fork designed to enhance the network’s scalability on Ethereum. The upgrade is set to substantially reduce transaction fees on the network, potentially by a factor of 10X, further contributing to the positive sentiment surrounding Ethereum’s price.
Additionally, the anticipated approval of a spot Ethereum Exchange-Traded Fund (ETF) holds the potential to propel ETH prices even higher, with experts foreseeing a surge in institutional interest. This echoes the success observed with Bitcoin ETFs, where the anticipation of their approval triggered a substantial price surge for Bitcoin between October and early January.
While the developments paint a promising picture of the cryptocurrency’s future, retail investors will likely stay on the sidelines, waiting for a price trigger before making market entries.
At press time, ETH was trading at $2,299, reflecting a 1.69% drop over the past 24 hours, as per CoinMarketCap data.