The Ethereum (ETH) protocol is witnessing a notable increase in network activity, with daily transactions reaching their highest levels in over a year, indicating renewed interest and adoption.
Analyst 'Cas App' pointed out the rise in the number of active and new wallets, reflecting genuine organic growth rather than just short-term speculation.
For its part, 'Merlin the Trader' reported that active addresses exceeded 674,000, the highest level since the peak of the bullish cycle in 2021, which preceded a significant market recovery.
This data indicates a renewed expansion in network usage.
Supply contraction:
With the ongoing EIP-1559 mechanism burning a portion of transaction fees, the supply of Ethereum continues to shrink.
Where net emissions remain close to zero, supporting the hypothesis of a balanced market backed by limited supply and increased usage.
This coincides with continued institutional inflows, as Ethereum exchange-traded funds recorded positive inflows of $154.3 million over the past week, according to 'SoSoValue' data.
This indicates investor confidence in digital assets despite recent market volatility.
The price of Ethereum is currently trading at $3550, with a daily increase of 3%, but it is still down 9% for the week.
Analyst 'Michael van de Poppe' points to an initial support zone between $3200 and $3350, with a critical long-term range between $2950 and $3050 if selling pressures continue.
The increased trading volume during recent declines is a sign of strong moves from investors.
The Relative Strength Index (RSI) falls within the neutral to weak range, suggesting that the market is calm, but still far from being oversold.
Analyst 'Van de Poppe' sees the possibility of a price recovery towards the $4000 level if current levels maintain their strength.
Although August often shows mixed performance for Ethereum, past experiences – as in 2021 – have proven the asset's ability to achieve strong gains at this time of year.