According to Santiment, Ethereum’s network growth has been on a declining trend since late October 2021. The price of Ethereum attained all-time highs of $4,867 on Nov. 10 and has since declined. Presently, Ethereum is trading at $3,213, down nearly 33% from its all-time highs.
Over the past year, Ethereum has had other Layer 1 and 2 tokens take a bite out of its market share as participants venture into tokens like Solana and Avalanche. A new crop of upstart blockchains such as NEAR, Harmony, Cosmos and Fantom seem to be making headway.
Many market participants, however, believe Ethereum’s shift from “proof of work” to “proof of stake” in mid-2022 might encourage more investors to bet on the network and its native token, Ether.
U.Today earlier reported on “The Merge” an update that the community expects to be activated on the ETH mainnet before June 2022.
At the time of publication, Ethereum was battling to hold the $3,200 level, down 3.89% in the last 24 hours. According to Santiment, ETH’s downtrend could be largely attributed to macro concerns surrounding CPI, inflation and the Fed’s decisions.
However, ETH’s Daily Active Addresses remain healthy-looking, despite dull price action and fewer new entrants. According to on-chain analytics firm Santiment, this could indicate that the network is still very active, which is a good sign, it states.
DAAs (Daily Active Addresses) remains a good technique to track network activity over time because higher DAAs indicate more blockchain usage. As a result, DAAs are sometimes used as a leading indicator for price movement-demand for network access may increase demand for the blockchain’s native token.
Another encouraging clue is that ETH’s supply on exchanges continues to fall even as the price declines, implying that some market participants may be stockpiling.