2023 has been a fantastic year for Ethereum (ETH) as it rises alongside other cryptocurrencies. ETH is currently buying and selling for around $1,650, up 40% from the start of the year. However, that may be premature to conclude that a new bull market has begun and that the cryptocurrency will be capable of reaching an all-time high of $4,800 later this year. Three key on-chain metrics that occasionally rise during aggressive bull markets remain very low, prompting some experts to warn against over-optimism.
Daily Transactions Are Suppressed
According to data from cryptocurrency analytics firm The Block, the number of daily transactions on the Ethereum network remains lower than last year’s levels. The 7-day shifting common (DMA) of daily transactions was just over 1 million, well under the all-time high of about 1.65 million in 2021. A surge in buying and selling volume could lead to higher ETH prices, but this has not yet occurred.
Energetic Addresses Fade
The number of daily active addresses interacting with the Ethereum blockchain was also lower than a year ago. The 7DMA for dynamic addresses is approximately 400,000, down from an all-time high of roughly 750,000 in 2021. An increase in the number of active addresses tends to correspond with an increase in the value of ETH. A surge in dynamic addresses may indicate that ether is about to rise, but this has not yet occurred.
Handle Progress Remains Calm
According to data from The Block, creating new addresses on the Ethereum network is slow and below year-ago levels. The 7-day shifting average was around 67,000, compared to about 80,000 in the same interval last year. As in 2017/2018 and 2021, the speed of generating new addresses will typically increase in lockstep with the value of ETH.
Despite the recent increase in ETH prices, experts advise traders to remain cautious. Whereas an upcoming Ethereum blockchain improvement in March could present help for additional worth positive aspects, three key on-chain indicators threaten to hinder this result. As a result, the bears may have the upper hand for the time being.
ETH bulls should also consider the overall cryptocurrency market environment, which is currently characterized by increased regulatory scrutiny, particularly about stablecoins, non-fungible tokens, and decentralized finance. Furthermore, some central banks are developing their digital currencies, which may pose a risk to cryptocurrencies like Ethereum.
Despite the challenges, Ethereum remains one of the most popular and valuable cryptocurrencies, with a market cap of over $200 billion. Furthermore, cryptocurrency has proven resilient despite regulatory pressure and external elements, and it remains popular among traders.
