Early signs that the Bitcoin bull market was brooding were tipped by a slow and steady increase in BTC address activity, and now that trend is happening in ETH wallets. Wallet activity has now reached a level not seen since this summer’s DeFi surge. But what exactly does this mean for the second-largest cryptocurrency?
Ethereum address activity returns to 2020 highs, concluded DeFi Bandwagon
The cryptocurrency asset class came into existence with the rise of Bitcoin, and since its inception, an entire market filled with thousands of coins has amassed.
As if fundamental analysis Compared to traditional assets was not challenging enough, but the way each cryptocurrency should be approached also varies fundamentally depending on its use.
Bitcoin is quite basic compared to others as its adoption can be measured by BTC wallet activity and blockchain transaction behavior. When more users own BTC and move it off the exchanges and not onto them, the price of the digitally scarce asset rises exponentially until those users are ready to sell again.
This fundamental formula for predicting adoption – and possibly price – is slightly different for Ethereum. Wallet activity matters, but due to the asset’s smart contracts and decentralized applications like DeFi, Dapp usage, total value locked in applications, and other statistics are also very important when measuring the altcoinlong-term health.
Active ETH addressed have revisited the DeFi summer peak in August | Source: glassnode.com
When these DeFi-related stats first exploded during the summer months, active ETH portfolios reached a two-year high. Now, even without the supporting DeFi bandwagon booming, those active addresses have hit a similar milestone.
Rising activity is great for adoption, but what does it really mean for the Ethereum price?
Crypto Market Cycle: Could Be The Top Altcoin Finally catching up on Bitcoin?
Ethereum is currently trading for more than $ 600 and is more than 50% away from its all-time high of $ 1,400 set in early 2018. The altcoin market reached nearly two to four weeks after Bitcoin did as the top ranked cryptocurrency’s profits poured into altcoins and eventually cash.
However, not only has Bitcoin set a new peak price in 2020, but the cryptocurrency is currently more than $ 3,000 higher than its past all-time record, even after a correction of more than $ 1,000.
Clearly, Bitcoin has been catching up and is excelling. Next, Ethereum could catch up and follow the trajectory of the top cryptocurrency.
Could this uptick in activity cause Ethereum to catch up to Bitcoin finally? | Source: ETHUSD on TradingView.com
Just as BTC wallet address activity rises above genuine interest and that familiar FOMO sentiment returns to Bitcoin, the same rise occurs in Ethereum.
A boost in wallet activity Last month, even the crypto market’s biggest laggard, XRP, helped skyrocket as part of a 200% rally. If Ethereum can deliver a similar performance, a rally of more than 200% is just what the altcoin should help propel it to past peak prices and possibly set a new record, much like Bitcoin.
And because just as the summer months have shown, when Ethereum takes off, altcoins – especially DeFi tokens – also start to move. Is this also the catalyst for a coming altcoin season?
Featured image from Deposit Photos, Charts from TradingView.com