Ethereum Network Growth Has Shot Up Recently

On-chain data shows the Ethereum adoption rate has hit a four-month high, which could be bullish for the cryptocurrency's price.

Fresh on-chain data reveals that the Ethereum adoption rate has hit a four-month high, a development that could bode well for the cryptocurrency’s price.

As per data shared by on-chain analytics firm Santiment, a massive number of wallets were recently created on the ETH blockchain. The key indicator in this case is the “Network Growth,” which tracks the total number of new addresses appearing on the network on a daily basis.

An address, as the name suggests, is considered to have been used when it makes its first transaction on the chain. The Network Growth counts the daily number of such addresses that are becoming active for the first time.

When the value of this metric is high, it means that a large number of new addresses were just opened up on the network. This could be because of new investors coming into the market or old ones who had left earlier returning to it.

The development can also take place when existing users open fresh addresses for better privacy. All of these would generally happen at once whenever the metric registers a spike, so some adoption could be assumed to be taking place on the net.

On the other hand, a low indicator implies that not many new addresses are being created on the network, which could potentially be a sign of waning interest in the cryptocurrency.

Now, here’s a chart that shows the trend in the Ethereum Network Growth over the past few months:

As highlighted in the chart above, the Ethereum Network Growth observed a sharp spike yesterday, with 126,210 new addresses appearing on the blockchain within 24 hours.

This latest value is the highest indicator observed in over four months, suggesting that the asset is attracting an exceptional number of users.

Generally, adoption is bullish for any asset in the long term, as a wider user base can provide a stronger foundation for future price moves to grow. In the short term, though, spikes in the Network Growth can take the coin’s price in either direction.

The graph shows that spikes in the indicator coincided with some local tops in August. These spikes were a sign of FOMO around the price surges, and excessive hype has never been good for any asset, which may be why the tops occurred.

This time around, however, the uptick in the Network Growth has come as Ethereum has been dropping instead. Such an increase in interest while the asset isn’t doing so well could potentially help fuel a rebound.

ETH Price Action