Many analysts predict that a parabolic rally may be imminent for ETH, pointing to the DeFi ecosystem and the foundations of the growing network.
11 Ethereum indicators suggesting long-term optimismNOTES
With Ethereum slowly advancing to new highs in the past 24 hours, several viewers believe Ether can quickly exceed the $1,400 price range.
The Ethereum’s robust fundamentals are strengthening the belief that Ether can navigate the resistance by mid $1,400, with many pointing to the Ethereum’s growing DeFi ecosystem as the most likely force to propel ETH to price discovery.
On January 19, Spencer Noon of crypto VC fund Variant shared 11 indicators he believes suggest a bullish parabolic race is near. He pointed to the fact that more than a million unique addresses have interacted with DeFi in the past eight months.
Defi Portfolios: Dune Analytics
The monthly volume of DEX is currently at its highest of more than US$30 billion, while more than US$20 billion has been deposited in DeFi loan protocols – of which more than US$4.5 billion have been issued as outstanding loans.
Looking beyond DeFi, Noon also notes that Ethereum is the leading blockchain network for daily fees generated – surpassing the BTC by more than 50%; the number of active Ether addresses daily has doubled in the past 12 months, peaking at 550,000; and that almost $20 billion in stablecoins were coined at Ethereum last year.
The topic notes that more than $25 billion is currently allocated to DeFi, adding that 21 decentralized financial protocols now represent at least $100 million in total value allocated each.
Despite Ethereum’s emerging fundamentals, Noon notes that the number of Ether transactions valued at more than US$100,000 is seven times lower than during the January 2018 highs, suggesting that “the institutions have not yet come into play.
On the same day, Token Terminal, an analysis platform that uses traditional financial metrics such as P/E to examine the cryptomime markets, tweeted a graph of Ethereum’s “price/sales ratio” with the legend “this time is different.
The graph shows that the price of Ethereum in relation to the rates generated by the network is reaching historic lows – suggesting that the market may be extremely undervalued. However, the responses on Twitter challenge the applicability of metrics to Ethereum, noting that Ethereum “sales” include fees that are charged by miners.
Messari also shared data indicating that the daily transaction volume of Ethereum now exceeds that of Bitcoin by 28%.