Is Ethereum’s on-chain activity closing in on its ATH?
- Transactions on the blockchain spiked as ETH’s trading volume fell.
- Network growth also decreased as ETH held on to the $1,600 region.
Ten months after FTX collapsed, the exchange was on the lips of many players in the market again, as the court approved the liquidation of a sizable part of its assets. This reappearance ensured that the social volume and dominance around FTX jumped.
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ETH takes second place
However, according to Santiment, conversations surrounding FTX were not the only metric that rose. Interestingly, Ethereum’s [ETH] on-chain activity also reached its second-highest ever in history on 14 September.
? Conversations related to #FTX have hit a 5-month high after the exchange received approval to liquidate $3.4B in #crypto. #Ethereum, in particular, has seen odd #onchain activity since, including its 2nd largest activity day of all time yesterday. https://t.co/fFXYKicnMx pic.twitter.com/lnrqYW9hmy
— Santiment (@santimentfeed) September 14, 2023
As the name suggests, on-chain activity refers to blockchain transactions that exist and have been verified by validators or miners. Although on-chain activity increased, the daily trading volume of ETH fell.
At press time, Santiment showed that Ethereum’s trading volume was down to 4.73 billion. The trading volume is a different metric from on-chain volume, in the sense that the trading volume only considers transactions on exchanges.
However, on-chain volume measures transactions involving external wallets. Therefore, the decrease in trading volume means that most of the activity on Ethereum occurred outside the shores of exchanges.
To buttress the on-chain activity point, active addresses was one metric to go to. Active addresses show the number of unique addresses involved in transactions daily. In tracking this data, this metric indicates the daily level of crowd interaction (or speculation) with a token.
As of 14 September, there were over 1.1 million active addresses on the Ethereum blockchain. This meant that a lot of distinct addresses participated in the transfer of assets over the network.
Overlooked by the new entrants
Unfortunately, the rise in active addresses could not save Ethereum’s network growth from a notable fall. At the time of writing, the network growth was down to 27,500. Network growth measures the number of new addresses interacting with a network.
Therefore, the chart above means new addresses were not the main players in the rise in on-chain activity. The decrease also means that user adoption of ETH was very low. For ETH, the increase in network activity did not do much to change its price action.
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At press time, ETH’s price was $1,627, similar to what it was at the beginning of the week. Also, it is also interesting to see that the FUD around ETH, being one of the cryptocurrencies listed for FTX liquidation, has failed to materialize into a price plunge.
However, market participants may need to watch out for the timeframe FTX sets for liquidation. As it stood at press time, it was likely that ETH would continue to consolidate around $1,600.