Secret Strength of Ether: Explosive On-Chain Activity
Although the price of Ethereum (ETH) has soared 200% since its lows in mid-April, the blockchain is where the actual action is taking place. Core network activity has increased, despite the recent decline from a new high above $4,900, garnering media attention. This implies that there is more to this rise than just speculation.
Alongside price increases, Ethereum’s network fundamentals are getting stronger, according to Michael Nadeau of The DeFi Report. According to his analysis, priority fees and MEV operations currently account for almost 75% of the network’s earnings. This indicates that there is a growing need for block space. Additionally, the quantity of stablecoins has increased to $156 billion, a 14% rise since the start of July, with USDT and USDC controlling the network’s circulation.
Institutional Ethereum Accumulation Surges Despite Market Volatility
With Layer 1 (L1) handling about $6 billion in settlements every day, transfer volumes are also getting close to record highs. Growing institutional interest in ETH has paralleled this heightened network activity. For instance, Tom Lee’s BitMine Immersion Technologies declared on August 25 that it has become the largest corporate holder of Ethereum with about 1.7 million of the cryptocurrency, worth over $8 billion.
Volatility is still noticeable, though. Shortly after reaching a new record high yesterday, Ethereum fell more than $550, wiping away leveraged positions worth over $110 million. That correction occurred despite ongoing institutional and whale accumulation, indicating that market sentiment is still brittle in spite of structural expansion.
ETH/BTC Ratio Rebounds as Ethereum Outpaces Wider Crypto Market
ETH was trading at $4,533 at the time of writing, down 2.09% over the previous day but still up 5.51% over the previous seven. Ethereum‘s relative strength is highlighted by the fact that the larger cryptocurrency market has decreased by 0.3% within the same time frame. And that’s not all. The asset is up 65.82% year over year and up about 18.29% over the previous month.
Furthermore, the ETH/BTC ratio is currently trading at 0.0403, down 3.6% this week but still rising from its low of 0.024 in mid-April. According to Nadeau, this momentum is being accelerated by Layer 2 (L2) networks, since transaction volumes are getting close to record levels. Nearly half of all activity in this market is driven by Coinbase’s Base, with Worldcoin and Arbitrum following closely behind.
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