• Ethereum (ETH) has enjoyed an excellent start to 2023, rallying in tandem with the broader cryptocurrency market.
• Three key on-chain metrics that typically all shoot higher during an aggressive bull market all remain very subdued.
• Until these metrics turn higher, bulls should temper their optimism for a return to record ETH prices.
Ethereum Price Rally
Ether (ETH), the cryptocurrency that powers the smart-contract enabled Ethereum blockchain, has seen tremendous gains in 2021 as it rallies in tandem with the broader cryptocurrency market. At current levels close to $1,650, Ether is close to 40% higher on the year.
A number of key on-chain metrics suggest that further upside for ETH may be hard to sustain until they begin to show signs of improvement. These include daily transactions, active addresses and address growth which have remained below their levels this same time last year.
The 7-Day Moving Average (DMA) of daily transactions was last just above 1 million, still well below its record highs hit in 2021 of around 1.65 million. A pick-up in transactions could be a lead indicator for a pick-up in the ETH price when it happens.
The number of daily active addresses interacting with the Ethereum blockchain also remains below its level this time last year according to The Block’s data. The 7DMA of active addresses was last around 400,000, still well below its record high of around 750,000 in 2021. An uptick here could correspond with an Ether rally later down the line if/when it occurs.
The rate of new address creation tends to spike in tandem with rallies in the ETH price and yet remains sluggish compared to this time last year according to The Block’s data; The 7DMA was last around 67,000 compared to 80,000 this time last year . Unless there is a significant improvement here it may be difficult for Ether prices return back up towards their previous records highs from 2017/2018 and 2021 respectively