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Activity levels on Ethereum peaked in two years, going by one metric.
The seven-day moving average of the number of active ether addresses climbed to 405,014 on Friday, a threshold not seen since May 2018, according to data provided by blockchain analytics firm Glassnode.
Active addresses are the number of unique addresses active on the network as a sender or recipient. Glassnode only takes into account those addresses that were active in successful transactions.
As of Monday, the seven-day average has dropped slightly to 390,162. This is still 115% growth from the low of 180,750 seen on January 30th.
The rise in ether activity could be associated with the explosive growth of Ethereum-based decentralized finance (DeFi) platforms, as well as the number of daily tether transactions (USDT) on the network.
As of press time, approximately 3.1 million ethers were stuck in various DeFi applications, according to data source defipulse.com. Meanwhile, the number of daily USDT transactions – the most widely used stablecoin – on Ether has increased by more than 400% this year, according to CoinMetrics.
Also Read: DeFi’s “agricultural revolution” has led Ethereum users to turn to decentralized exchanges
Many expect the increased demand for aether resulting from such use cases will 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 practically moving in tandem with bitcoin. The one-year ether-bitcoin correlation has risen to 89%, the highest ever recorded, according to crypto derivatives research firm Skew.
Some observers 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 this is true, Ether’s active address metric is more reliable than that of bitcoin. “Active addresses are inflated on bitcoin due to the UTXO model”, tweeted to Antonio Sassano, Product Marketing Manager SetProtocol and co-founder of EthHub, an open-source initiative founded by the Ethereum community.
UTXO stands for unspent transaction output. With the UTXO model, bitcoin users have to use new addresses with each transaction. Meanwhile, Ethereum uses an account model, whereby addresses are reused, as noted by Sassano.
According to Bloomberg analysts, Bitcoin’s daily active addresses have recently risen to their highest level since December 2017, suggesting the possibility of a price rally to $ 12,000.
As of press time, bitcoin is changing hands at $ 9,270, which represents a 0.8% drop over the course of the day, and ether is trading at $ 238, down 1.7%, according to data from CoinDesk.
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Ether rose 6% on Monday to print its largest one-day gain since June 22. However, a declining trend line from June 2 and June 24 highs is still intact.
If network activity is any guide, the cryptocurrency could soon break the trendline resistance, currently at $ 246. This would signal a continuation of the rally from March lows below $ 100 and expose $ 289 (Feb 15 high. ).
Disclosure: The author has no cryptocurrency assets at the time of writing.
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