Ethereum Network Rebounds, Sees Massive Growth as ETH Holds Above $3K

Ethereum (ETH) has rebounded, crossing US$3,200 (AU$4,866) over the weekend after an impressive network expansion, marked by a record 196.71K new addresses on May 4, 2024 – the highest in over 19 months since October 2022, analysts at Santiment report.

Although the price of ETH has since corrected by around 5%, the surge in new wallets indicates increased adoption and investor confidence, despite market fluctuations, with the total number of non-empty wallets now at 121.17 million.

Related: Groundhog Day: SEC Continues to Delay Spot Ethereum ETF Decisions

This growth, seen as a bullish sign, suggests strong market sentiment and a robust foundation for future expansion, the analysts said.

ETH’s Under-Performance Post BTC Halving

After the recent Bitcoin halving, Ethereum prices initially took a steep downturn, analysts at glassnode said, echoing the drop in Bitcoin’s value and marking the worst post-halving performance Ethereum has ever recorded.

This immediate decline after the halving event saw both cryptocurrencies experiencing significant price corrections. However, in the days following this sharp decline, Ethereum prices began to recover.

This rebound not only offset the initial losses but also pushed Ethereum’s overall performance into positive territory, according to the analysts. They said the recovery suggests a resilient market sentiment and a return of investor confidence, possibly influenced by broader cryptocurrency market dynamics and speculative optimism about future growth.

Glassnode adds that Ethereum has experienced notably shallower corrections since the FTX lows, indicating increased resilience and reduced volatility in the digital asset space.

However, its deepest drawdown in this cycle was -44%, over twice as severe as Bitcoin’s -21%, highlighting Ethereum’s relative underperformance in the last two years. This is also reflected in a weakening ETH/BTC ratio.

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Ethereum investors have not seen prices surpass the 2021 highs, showing a significant lack of new capital inflows compared to Bitcoin, partly due to Bitcoin’s advantage from spot ETFs.

While awaiting the SEC’s decision on Ethereum ETFs, there’s also notable divestment among Ethereum’s Long-Term Holders, indicating a strategic profit-taking during periods of high demand, glassnode concluded.