On-chain data from Ethereum shows positive signals

Leading smart contract platform Ethereum (ETH) has reached a new low in its circulating supply following the so-called ‘The Merge’. In the past month, approximately $300 million worth of 86,219 ETH was taken out of circulation, which has also driven the price higher.

New addresses on ETH

The decline in Ethereum’s circulating supply suggests growing demand and increased use of the Proof-of-Stake (PoS) network, resulting in an accelerated burn rate. It was also recently reported that the number of new daily addresses on the Ethereum network exceeded 116,000, the highest level since the beginning of the year.

All this could indicate an increase in user activity on the Layer 1 network. At the time of writing, ETH’s circulating supply has reached its lowest level in 548 days since the network transitioned from Proof-of-Work (PoW) to Proof-of-Stake. Additionally, an assessment of Ethereum’s decentralized finance (DeFi) ecosystem also shows an increase in total locked value (TVL) over the past month.

Ethereum on-chain insights

Ethereum’s on-chain data shows that its Total Value Locked (TVL) at the time of writing was $51 billion, representing a growth of 21% over the past 30 days. During the same period, the TVL of Lido Finance, the leading protocol on the network, increased by 27%.

In line with the recent rise in the altcoin market, Ethereum recorded an increase in trading volumes on decentralized exchanges (DEX) over the past month. According to data from Artemis, daily trading volume between DEXes built on Ethereum increased by a whopping 161% in the last 30 days.

The NFT sector within the cryptocurrency network also showed growth over the past month. Data from CryptoSlam showed that NFT sales volume increased by 17% over the past 30 days, resulting in total sales of $617 million. This growth in transaction volume occurred despite a 57% decline in the number of completed transactions for NFT sales during the same period.

ETH reserves on exchanges are rising

As the cryptocurrency market significantly overheated and the crypto Fear and Greed index indicated greedy sentiment increased, ETH sales also increased. This resulted in an increase in ETH reserves on exchanges. According to data from CryptoQuant, the reserve of ETH on exchanges stood at 14.1 million, the highest level in the past month, which is often seen as a bearish signal.

All in all, however, the future looks bright. The number two cryptocurrency of the moment appears to be far from finished growing in both popularity and price. As the network becomes more used, the demand for ETH will increase, which will also have a positive effect on the price.