Ethereum Market Points to the “Start of a New Bull Cycle;” New Addresses Hits a 25-Month High

Last week, ETH touched $535 a couple of times, only to follow the Bitcoin bulls and make it back to $595.

Over the weekend, the surge in price also saw the number of new ETH addresses hitting a single-day, 25-month high, reaching 177.5k addresses.

“Notably, more addresses interacting on an asset’s network is a very promising indicator for bulls,” stated crypto data provider Santiment.

Today, however, the second-largest cryptocurrency went back to $582.

According to one trader, Ethereum is simply at the “start of a new bull cycle,” with points of interest for longs around $425-$460 with any dips to be bought. “The next higher high in the impulse wave is most likely going to be $850 or $1,150,” he added.

Despite more than double of Bitcoin’s gains in 2020, ETH is still 63% away from its all-time high.

The Bullish Signs

ETH’s outperformance also led miners to slowly offload their ETH, with their aggregate holdings declining from 1.13 million ETH to 1.016 million ETH since mid-October.

At the same time, there has been a 15.2% decline in the amount of ETH held by exchanges. This kind of decline was last seen during the 2017 bull run. This is likely to result from an increased focus on self-custody, long-term storage, and yield opportunities in DeFi. ~57% of ETH’s total supply hasn’t actually moved in a year.

Currently, there are over 7 million ETH locked in the DeFi space. Ethereum is the dominant smart contract platform, which, according to Coinbase, has proven to be “comparatively secure so far.”

However, it has its own drawbacks in the form of scaling and control, and flexibility. And projects like Polkadot and Cosmos are the front-runners as its competitors.

The Risk of Centralization

Amidst all the price action, the number of ETH locked in the ETH 2.0 deposit contract for staking continues to grow.

A total of 1,466,401 ETH worth more than $860 million have been sent to ETH2.0 deposit. This represents nearly 1.3% of ETH’s circulating supply, signaling strong demand for Proof of Stake participation.

However, this comes at the risk of centralization. Justin Drake, ETH 2.0 researcher at Ethereum Foundation, noted that 10.7% of validator deposits are from crypto exchange Kraken while other exchanges Coinbase and Bitfinex have 5.8x more ETH than Kraken. Drake said,

“Two exchanges could control 1/3 of the validators. Five exchanges could control 1/2 of the validators. Stake from home to avoid exchange fees and decentralise.”

According to Dune Analytics, these deposits came from 3,736 unique depositors.

Read Original/a>
Author: AnTy

Related Articles

Author: ICO Warz