The world's second largest cryptocurrency Ethereum (ETH) has shown its fangs during this market recovery. Since the beginning of 2023, ETH has increased more than 40% and is now in a strong demand zone.
At the time of writing the price of ETH is only down 2.12% to trade at $1,640.80 and a market cap of $199 billion. Recent activity suggests that $1600 could serve as strong support for ETH going forward. Citing data from IntoTheBlock, renowned crypto market analyst Ali Martinez opines:
Market players should take note that the $1,600-$1,650 level represents a significant support area for Ethereum. Onchain data shows that 1.94 million addresses bought 8 million $ETH between $1,600 – $1,650. As long as this significant wall of demand remains, ETH has a good chance of continuing to soar.
ETH is currently facing strong resistance at the $1,700 level. However, any break above this level could help in pushing ETH higher further.
According to a data report from Analytex, user activity on the Ethereum platform spiked significantly in the last month of January 2023. This has finally translated into a spike in the average gas price on the Ethereum blockchain network.
Calculated in gwei, the smallest Ethereum denomination, the average gas price jumped by 29.27% in January 2023, compared to the previous month. The report also added that the average number of unique active Ethereum wallets per day decreased by 10% to 387,475.
Furthermore, there was a decrease in daily Ethereum transaction data of 0.8% from December to January. Average daily ETH transactions have been declining for eight months now.
The recent spike in user activity on Ethereum may also be due to the recent increase in DeFi activity. Total value locked (TVL) across different decentralized finance protocols surged in the last month of January 2023.
The upcoming Ethereum Shanghai hardfork is also driving bets in DeFi due to the expected opening of production from the Ethereum staking contract in March 2023. The market is focused on seeing if ETH can jump to $2,000 at the time of the Shanghai hardfork.
