Although the price of Ethereum (ETH) has been hovering between $340-350 for the past month, multiple on-chain indicators indicate that Ethereum may be rebounding.
Santiment, a cryptocurrency data analysis company, recently pointed out that the number of deposits on exchanges has been decreasing since the beginning of September. According to the company, the number of addresses used to send Ethereum to exchanges has fallen by 53% since September 1.
Although the ETH selling pressure on exchanges has eased, the number of new users on the ETH network has been steadily increasing.
According to data from glassnode, the number of addresses holding at least 0.01 ETH has reached a record high of 10,116,076.
This growth is largely driven by the DeFi industry. Just this week, the monthly active users of Etheruem Wallet and MetaMask exceeded 1 million, and this number has tripled since February this year.
Crypto whales have also been hoarding Ethereum at the current price, which shows that they believe that the price of altcoins is too low.
Although it is difficult to assign specific value to crypto assets due to the large fluctuations in the market, Ethereum is the best performing cryptocurrency in 2020, and the benefits of altcoins still far exceed those of Bitcoin.
According to Santiment’s data, the top 100 Ethereum whales have been hoarding Ethereum in the past 40 days. During this time, the balance of these addresses increased by 3.7 million Ethereum.
DeFi activities continue to expand
In 2020, the decentralized financial industry dominates the cryptocurrency field, which is obviously one of the main reasons why people are increasingly interested in Ethereum and other digital assets.
The growth of the decentralized financial industry has also increased the use cases of Ethereum and will focus on the blockchain network that provides Layer 2 technology.
In September, the price of DeFi tokens suffered a huge blow, but user activity in the industry remained strong.
According to Digital Assets Data and DeFi Pulse, the total value locked in DeFi is $10.5 billion, which has increased by 26% in the past 30 days.
Transaction activity in the DeFi industry also hit a new high. For example, the decentralized exchange Uniswap had a record monthly trading volume of $15.3 billion in September, surpassing Coinbase.
Activities in other areas have also increased. According to data from Non-fungible.com, last month, the value of transactions in the Nonfungible Token (NFT) industry exceeded $7.7 million.
DeFi will have some growing pains
Although on-chain analysis shows the bullish outlook of Ethereum, it is worth noting that the current foundation of the Ethereum blockchain is weak, because congestion and high fees are still problems with the Ethereum network. This has led developers and various DeFi platforms to search and experiment with blockchain networks that provide layer 2 technology.
Last week, the US Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ) launched an investigation into BitMEX, arrested the co-founder of BitMEX, and announced that the owner of the exchange was accused of operating an illegal derivatives exchange and violating banks law.
On October 5, the U.S. Department of Justice also announced that John McAfee was arrested in Spain for tax evasion. The U.S. Securities and Exchange Commission (SEC) accused McAfee of propagating an initial coin offering (ICO) and did not disclose that the ICO issuer paid him. Ask him to post news about each project on Twitter.
It is obvious that relevant departments and regulatory agencies intend to pursue individuals and companies that evade the law in order to promote their own encryption products and services.
Considering that decentralized exchanges such as Uniswap lack KYC and AML policies, DeFi may easily become the next target for SEC, CFTC and DOJ tracking, especially as the number of fraudulent projects in this field continues to increase.
