Ethereum network growth remains on a downtrend, but here’s an encouraging sign on prices
According to Santiment, Ethereum’s network growth has been on a downward trend since late October 2021. Ethereum’s price reached all-time highs of $4,867 on November 10 and has since declined. Currently, Ethereum is trading at $3,213, down nearly 33% from its all-time highs.
📊 So how is it going #Ethereum watch now with prices just under $3,300? Much of this downward trend can be attributed to inflation and the Feds. However, excessively fearful sentiment and the continued decline in the FX supply could be a good sign. Read our latest! https://t.co/jXP9HmGuQP pic.twitter.com/7qP70y6Kyn
— Santiment (@santimentfeed) January 13, 2022
Over the past year, Ethereum has seen other Layer 1 and Layer 2 tokens take a bite out of its market share as participants venture into tokens like Solana and Avalanche. A new generation of blockchain upstarts such as NEAR, Harmony, Cosmos, and Fantom appear to be making progress.
However, many market participants believe that Ethereum’s move from “proof of work” to “proof of stake” in mid-2022 could encourage more investors to bet on the network and its native token, Ether. .
U.Today previously reported on “The Merge” an update that the community expects to activate on the ETH mainnet before June 2022.
Here is an encouraging sign on the Ethereum price
At press time, Ethereum was battling to hold the $3,200 level, down 3.89% in the last 24 hours. According to Santiment, ETH’s downtrend could be largely attributed to macroeconomic concerns regarding CPI, inflation, and Fed decisions.
However, ETH daily active addresses remain healthy, despite lackluster price action and fewer new entrants. According to on-chain analytics firm Santiment, this could indicate that the network is still very active, which is a good sign, it says.
DAAs (Daily Active Addresses) remain a good technique for tracking network activity over time, as higher DAAs indicate increased blockchain usage. As a result, DAAs are sometimes used as a leading indicator of price action – demand for network access can increase demand for the native blockchain token.
Another encouraging sign is that the supply of ETH on exchanges continues to fall even as the price drops, implying that some market participants may be building up stocks.