Ethereum (ETH), the second largest cryptocurrency, leads other layer 1 blockchains in important metrics. Data shows a sharp increase in active addresses on Ethereum's mainnet and major Layer 2 networks. The surge in active addresses comes despite ETH recording a decline in price on the daily chart.
Ethereum active addresses are rising rapidly
Data from crypto analysis platform IntoTheBlock reveals that Ethereum has reached a new milestone of surpassing 5 million addresses across the Ethereum mainnet and major L2 platforms. Ethereum currently outperforms other top protocols such as Solana (SOL) and Binance Coin (BNB), including other L2s in active addresses.
An address is considered active after it has effectively performed transactions as a sender or receiver within a certain period of time. Therefore, active addresses represent the total number of users transacting on the network.
– Advertisement –
An increase in active addresses usually indicates an increase in blockchain usage, which can be an effective way to monitor network activity over time. Therefore, this metric is often a leading indicator of price movements, as increased network usage can increase the demand for a blockchain's native tokens.
However, the latest network usage has not had a positive impact on the ETH price. As of this writing, ETH price is trading at $2,628, down 1.9% in the past 24 hours. Ethereum also halted its weekly rally and is down 1.28% over the past week.
The spike in address activity could also be due to increased selling pressure on ETH in recent days. Investors accumulate more coins at lower prices to maximize profits when momentum builds. This helped push network activity to a local high.
Overall Outlook for Ethereum Layer 2 Solutions
Across the Ethereum Layer 2 ecosystem, Coinbase’s Base leads in daily velocity and other performance metrics. Within the past 24 hours, Base recorded a transaction rate of 69.59 transactions per second (TPS) per L2Beat data. Base ranks highest among L2 players with 160.7 million 30-day transactions.
Furthermore, Base follows Arbitrum as the largest Ethereum Layer 2 by Total Value Locked (TVL). On October 22, the TVL of all Ethereum Layer 2 solutions increased to $38.37 billion, an increase of 217% from a year ago.
Of these, Arbitrum has the highest TVL at $14.06 billion. Base follows with $7.74 billion, followed by Optimism Mainnet with $6.32 billion.
TVL is a cryptocurrency metric used to measure the total value of digital assets staked on a particular decentralized finance (DeFi) platform. The higher the TVL, the more secure and reliable the platform is guaranteed.
Price prediction for ETH price
The price of Ethereum is expected to skyrocket as the number of active addresses increases. However, 24-hour trading volume fell 16.9% to $15.9 billion, indicating investors' pessimistic outlook. Ethereum price forecast sentiment is neutral, while the Fear and Greed Index shows Greed at 70.
Crypto analysts predict that ETH could fluctuate between $2,558.28 and $2,725.58 in October 2024. Meanwhile, Ethereum co-creator Vitalik Buterin aims to scale the network to over 100,000 TPS. This is part of a long-term strategy focused on improving both Layer 1 and Layer 2 networks.
