Why is Ethereum preparing for a long price rally?
Ethereum is trading above $ 600 as it was last weekend. However interesting is that Price continues at its current level despite its decreasing correlation with Bitcoin. Recent developments in Ethereum charts show that the narrative that led to the BTC price rally is also preparing for Ethereum. Over the past two months, the increase in Ethereum transactions is almost the same as in the first week of November, with miner revenue and network transaction fees rising as well.
The pattern that emerges in this chart, Interestingly, supports more increase in the number of Ethereum transactions over the next week. As an increase in transactions on the Ethereum network is accompanied by a decrease in the active supply of Altcoin, the Price rally may continue. Just before the launch of ETH 2.0, there was a decrease in the active supply of Ethereum. 1y-2y (1d Moving Average) reached 23,028,693,493 ETH, the lowest level in 11 months. 23,134,927,958 ETH, the lowest level of the previous 11 months, was observed on January 03, 2020, about 11 months ago.
In January 2018, metrics such as active supply and hourly transfers were at a similar level.
The highest daily increase in Ethereum’s unique addresses was recorded as 355,726 in January 2018 and is currently 352,638 daily increase. Ethereum is approaching 2018 demand, according to data from Etherscan.
The 2018 price rally was a result of creating high demand in Spot and derivative exchanges and correlating Ethereum with Bitcoin, and when we compare the current scenario with 2018, we see that demand generation is close enough to the 2018 level. for the past two years. Although Ethereum is lower than on-chain analysts expected, it continues to experience a correlation with Bitcoin, and metrics such as transaction count, Miner income and active procurement all signal towards a longer and sustainable price rally. Ethereum’s price correction situation exists, just like it is for Bitcoin, However, the likelihood of a continuous price rally is higher due to the “shortage of supply” and the increased demand from exchanges just before the launch of ETH 2.0.