On-Chain Data: Ethereum Price Surge is Steered by Old Addresses Stacking Up
A lot of attention is on Ethereum (ETH) presently as the digital currencies’ price trend is surging to beat the $3,000 resistant point. For the most of the day, the price action has seen a limited volatility with market bulls largely in control of the prices. At present, the world’s largest open source crypto coin is changing hands at $2,817.43, up 4.47% in the past 24 hours.
The uptick in the price of Ethereum is largely driven by positive sentiments in relation to Ethereum Improvement Protocol 1559 which went live today. Amongst other things, the Ethereum blockchain will now operate through a base fee structure that will see all users pay the same gas fee for transactions.
Additionally, the base fee that is being paid by miners are currently being subjected to a periodic burning of which more than 1,000 ETH coins have been burned thus far per an earlier Coingape report. The deflationary model will help shrink the circulating supply, driving up price by virtue of an imbalance in the supply and demand curve. Investors understand this, and the current accumulation is backed by this sentiment.
Old Accounts More Functional
Contrary to what many may believe, on-chain data from Glassnode suggests that the total number of new addresses in the Ethereum blockchain is pegged at 3,161, down 11.53% in the past 24 hours. The number of active addresses also plunge down by 7.91% to 29,267, an indication that the majority of price action that is evident is likely being stirred by old Ethereum addresses.
While the coin’s trading volume is up by over 33% to $31.15 billion according to CoinMarketCap, other on-chain metrics are largely bearish, calling to question the sustainability of the current uptrend. Exchange deposits are on the decline by 13.8% to 16,238 ETH per Glassnode’s data. This decline is notably negated by the deposits into the Ethereum 2.0 smart contract which has notably being on the upside.
There is a new Ethereum infrastructure for DeFi protocols and other platforms to leverage to rebrand their transaction mechanisms. With the usability that is bound to be improved, more investors may continue to bet more on Ether and the future of the Ethereum blockchain. Whether it is with new or old addresses, the overall impact will be a surge in price
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