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The price of Ether (ETH) is currently between $ 440 and $ 470, which is similar to the price action seen in December 2017. At the time, the scenario ended up being incredibly bullish and the altcoin quickly climbed to $ 1,400. .
We are rapidly advancing into 2020 and some investors believe a similar outcome may occur as some key on-chain and technical indicators mirror the levels seen in the previous bull run.
On December 10, the price of Ether was $ 450 and it took only 34 days for Ether to reach its all-time high. Prior to this price explosion, the altcoin was trading sideways for over two weeks. If anything like this happens, on-chain metrics and historical data suggest it could happen in the next ten days.
Take note of how recent price movements have raised investor hope that the next crypto-bull market will mirror the one seen in late 2017. Although price is an important metric, it does not provide granularity for network usage and volume. .
To assess the size and quantity of daily transactions, Coinmetrics provides correct transactions and transfers the data.
The chart above shows $ 1.9 billion in the most recent transfers and transactions, a 46% increase from the previous month. While the rise in Ether prices undoubtedly helped, the same effect occurred in late 2017.
The average daily notional traded and transferred on the Ethereum network in November 2017 was $ 830 million. That all changed by the end of the month, when the indicator crossed the $ 2 billion mark. This same indicator has strong links with the current scenario.
To better assess network activity, you should also analyze the daily number of active addresses. Although it should not be interpreted as the number of active users, it does provide a reliable indicator of network usage.
The November data appears to repeat the previous month’s peak at 550,000 daily active addresses. This time around, activity appears to be at a much higher level than at the end of the 2017 era.
Of course, it may be necessary to adjust to the growing use of decentralized finance (DeFi) and stablecoins. Yield pools and decentralized exchanges are responsible for tens of thousands of daily transactions involving multiple addresses.
As you might expect, the number of daily active addresses in November 2017 was 200,000, significantly below the current number. However, by the end of the year they managed to reach up to 500,000 network addresses per day.
On-chain analysis may have been close enough to where it is now, but price action largely depends on volume. After all, trading does not necessarily have a direct relationship to network usage.
The current average daily volume of $ 1.3 billion represents a 50% increase over the previous month. This is a remarkable fact as it does not include decentralized exchanges.
Oddly enough, the current Ether volume stands out on the same level as seen in December 2017. Therefore it could be concluded that this is too big a coincidence to ignore.
Current daily active addresses, notional transactions / transfers, and volume traded are aligned with the 2017 year-end period, when Ether traded near the $ 450 mark.
For this reason, analysts have solid reason to believe that a $ 1,400 bullish run is in the realm of possibility within the next few weeks.
Will a renewed decentralized finance (DeFi) frenzy be enough to generate an influx similar to that seen during the 2017 ICO era? Or will institutional and large investors sustain a powerful 300% rally?
Remember, as they say, “history does not repeat itself, but often rhymes”.
The views and opinions expressed herein are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your research when making a decision.
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