Bitcoin remains dominant in the current rally, but on-chain data suggests that Ethereum could be the next asset to see significant price gains.
Ethereum Benefits from Bitcoin’s Rally
Historically, Ethereum has shown strong price performance following Bitcoin’s growth, thanks to profit rotation between the two assets. Data from IntoTheBlock indicates similar potential now. However, on-chain metrics present mixed signals, making Ethereum's outlook more complex.
On-Chain Activity: Mixed Signals
Ethereum's blockchain data reveals several interesting trends. Daily transactions have risen to an average of 1.22 million, up from 1.1 million three months ago. This growth indicates increased activity, although it remains relatively modest compared to previous bull markets.
Transaction volumes, however, continue to rise, reflecting growing interest from institutions and large holders. Whale activity, or the accumulation of ETH by major investors, is another bullish indicator, reducing selling pressure.
On the downside, the number of new Ethereum addresses remains below levels seen during previous bull markets. This decline is likely influenced by the rise of layer-2 solutions like Base. These solutions enhance Ethereum's scalability but still rely on its blockchain, ensuring continued demand.
Key Indicators Signal ETH Growth
Several key metrics suggest Ethereum is poised for further gains:
Reduced inflows to exchanges: This indicates lower selling pressure as investors opt for long-term holding.
Rising interest from short-term holders: This trend points to renewed interest from retail investors.
Long holding durations: This demonstrates that long-term holders are not selling, restricting supply.
Ethereum's Ecosystem and Growth Potential
Ethereum's ecosystem continues to expand, with the network processing over $40 billion in daily transaction volume. The price of Ethereum currently sits at $3,309.88, reflecting a 7.12% increase in the last 24 hours.
If Bitcoin can stabilize at its current highs, Ethereum could leverage its improving fundamentals to achieve significant growth in the coming periods.
Conclusion: Ethereum is positioned to follow Bitcoin’s growth. On-chain data reveals positive trends such as reduced selling pressure and ecosystem expansion. If favorable market conditions persist, Ethereum has strong potential for further gains.
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