This article is also available in Spanish.
On-chain data shows that metrics related to network activity have increased recently for Ethereum, which could pave the way for a new rally.
Ethereum transaction volume and number of whale transfers have increased recently
According to data from on-chain analytics firm Santiment, Ethereum saw an increase in two activity-related metrics. The indicators in question are trading volume and the number of whale transactions.
The first of these, “Transaction Volume,” tracks the total amount of cryptocurrency (in USD) that ETH network users transfer across the network with their transactions.
Related reading
When the value of this metric is high, it means that the ETH blockchain is currently processing the transfer of a large number of coins. Such a trend suggests that investors are actively investing in asset trading.
On the other hand, the weak indicator implies that interest in the cryptocurrency might currently be low as holders are only moving a small amount of ETH.
Now here is a chart that shows the trading volume trend for Ethereum over the past few months:
As seen in the chart above, Ethereum trading volume has seen a sharp increase recently, implying that interest in the asset has increased alongside the price rise.
This could be seen as a constructive development for the cryptocurrency, as increasing network activity is usually necessary for rallies to be sustainable.
In the past, some price movements started abruptly, but the trading volume did not see much increase at the same time. Such movements usually disappear quickly.
The chart also contains data for the other metric relevant here, “Number of Whale Transactions.” This metric measures the total amount of ETH transfers valued at over $100,000.
Transactions of this magnitude are assumed to originate from the Whale entities, so the number of Whale transactions reflects the level of activity of large investors.
From the chart, it is clear that this indicator has also recently increased for Ethereum, implying that the recent increase in volume is not only a sign of interest from small investors, but also from huge hands .
Naturally, it is impossible to tell based on these indicators alone whether investors are buying or selling, because all types of transactions look similar from their perspective. Given that ETH has seen a strong rally recently, this activity so far has likely been geared toward accumulation.
Related reading
The analytics company explains:
Expect any growth in Bitcoin, during this bull run, to see profits flow back to Ethereum and potentially push it towards its own all-time high as its network activity looks very healthy.
ETH Price
After seeing an increase of over 27% in the last seven days, Ethereum has surpassed the $3,150 level.
Featured image of Dall-E, Santiment.net, chart from TradingView.com
