While bitcoin is still hovering around $60-61k levels, ethereum is hitting new all-time highs. The price of ETH rallied above $4,600 on Wednesday and reached a market cap of just under $550 billion. This could be a starting point of an even bigger uptick in price, given the historical correlation between bitcoin and ethereum persists. The market sentiment towards ethereum is highly optimistic, as people now view NFTs and crypto gaming from a new perspective.
Not only that, the total value locked in DeFi hit a new all-time high of $274 billion, and addresses with more than 32 ETH have been increasing steadily for the last four months. In addition, the average transaction fee is again soaring, making people stake ETH and rely on other DeFi products. To better understand, we need to consider on-chain metrics related to the price and network growth.
Correlation to BTC
One of the most deciding factors of future ETH price is a correlation to BTC. This indicator measures how ethereum is deviating from bitcoin in terms of price. If the price of bitcoin starts rallying, then we can expect a similar movement from ethereum. However, right now, we are observing a slight drop off from the 30-day high. If the negative correlation increases, the price of ETH can increase independently. So, it is crucial to monitor this indicator and compare the price action of bitcoin and ethereum.
Total ETH Staked
The net volume staked on the ethereum network is important for its price because we can understand how much percentage of supply is locked and will not enter the market to drive sell pressure. At the moment, 8.15 million ETH is staked across various DeFi protocols. We can expect this number to increase, as the gas fee is still a concern and an entry barrier for many users.
Daily Active Addresses
The ethereum network is adding thousands of new addresses daily. In 30 days, the number of active addresses jumped from 500k to 700k. This is a positive sign moving forward, as it shows active usage of users. We want this trend to continue till the end of the year.
Ethereum Miner Revenue (Monthly)
The miner revenue is affected by the London hardfork, as it implemented a base fee structure, so it is important to check whether the miners are fairly compensated or not. The subsidy is at an all-time high, and the total miner revenue is still lower than that of May. Also, the transaction fee in October is only $200 million, whereas it was $1.03 billion in May.
Average Transaction Fee (7DMA)
When the May and June sell-off took place, the average transaction fee was down drastically. But as the ethereum network gained traction, it is again back to its previous levels. The average transaction fee increased from $8 to $53 in less than two months. With the price hitting new ATHs, we can expect the fee to go even higher, which is not a good sign, at least in the long term. The hard fork is supposed to help with the fee structure, but it seems only ETH 2.0 can overcome this challenge.
Top 20 Gas Consuming Smart Contracts
This chart shows us how rapidly NFT marketplaces like Open Sea draw users into exploring the new industry. It is nearly consuming the same amount of gas as Uniswap. We can expect OS to take over when NFTs go mainstream and come out of this correction period.
ETH Burn Rate
After the EIP 1559 upgrade, the ethereum network burned more than $3.5 billion worth ETH. The burn rate increased from 2 to 10 ETH since inception. The network is burning more than 10k ETH on average. While this still does not make ethereum a deflationary asset, it will help in driving the price.
Source- Burn Tracker
From an on-chain perspective, everything looks extremely bullish. On top of that, the technical price action shows us ETH is consolidating above the previous ATH. And that has also been a bullish sign. If bitcoin doesn’t observe a sharp fall and maintains a high positive correlation, we can expect a parabolic rally towards $10,000 in the coming weeks.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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