The price of Ethereum (ETH) is currently between US$440 and US$470, similar to the price trend in December 2017. At the time, the market was incredibly bullish, and Ethereum quickly soared to $1,400.
Fast forward to 2020, and some investors believe that similar results may appear because some key on-chain and technical indicators are reflecting the level of the previous bull market.
On December 10, 2017, the price of Ethereum was $450, and it only took 34 days for Ethereum to reach a record high. Before the price surge, Ethereum traded sideways for more than two weeks. If a similar situation occurs, on-chain indicators and historical data indicate that Ethereum may rise sharply in the next ten days.
Please note that recent price movements have given investors hope that the next round of crypto bull market will reappear the bull market of the end of 2017. Although price is an important indicator, it cannot provide detailed information on network usage and transaction volume.
In order to evaluate the scale and amount of daily transactions, Coinmetrics provides adjusted transaction and transfer data.
Ethereum’s recent transfer and transaction volume reached $1.9 billion, an increase of 46% from the previous month. However, the price increase of Ethereum undoubtedly played a role, and the same result occurred at the end of 2017.
In November 2017, the average daily nominal transaction volume and transfers on the Ethereum network reached US$830 million. By the end of the month, all this has changed, because this indicator has broken the $2 billion mark. This same indicator is closely related to the current scenario.
In order to better measure network activity, the number of active addresses per day should also be analyzed. Although it should not be interpreted as the number of active users, it provides a reliable measure of network usage.
The November data seems to be repeating the peak of the previous month, with the number of daily active addresses reaching 550,000. This time, the number of daily active addresses seems to be much higher than the level at the end of 2017.
Of course, people may need to adapt to the increasing use of decentralized finance and stablecoins. The daily transactions of mining pools and decentralized exchanges involve tens of thousands of addresses.
As one might expect, the number of daily active addresses in November 2017 was 200,000, which was significantly lower than today’s number, but by the end of 2017, the number of daily network addresses had increased to 500,000.
On-chain analysis may be close enough to the current state, but price movements depend to a large extent on transaction volume. After all, transaction activity is not necessarily directly related to network usage.
The current average daily transaction volume is US$1.3 billion, an increase of 50% from the previous month. This data is worth noting because it does not include decentralized transaction volume.
Strangely, the current Ethereum transaction volume has reached the level of December 2017. Therefore, one may conclude that this is too coincidental and cannot be ignored.
The current daily active addresses and nominal transaction volume of transactions/transfers are close to those at the end of 2017, when the transaction price of Ethereum was close to the $450 mark.
Therefore, analysts have every reason to believe that in the next few weeks, Ethereum may reach $1,400.
Is the recent decentralized financial frenzy enough to bring in capital inflows similar to the 2017 ICO period? Or did institutions and large investors contribute to a strong 300% rise in Bitcoin?
As the saying goes: “History does not repeat itself, but it is always surprisingly similar.”
