Statistics show that Ethereum [ETH] is at the forefront among Layer 1 (L1) and Layer 2 (L2) platforms when it comes to active wallet usage. As of October 2024, there are now over 5 million active wallets recorded on the Ethereum mainnet and its L2 networks.
The increase in active wallets serves as a significant indication of Ethereum’s growing dominance in the blockchain industry. The crucial question now is whether Ethereum’s price has responded to this surge in network activity or if there is a disparity between its utility and market performance.
Ethereum’s Lead in Active Wallets
An analysis of Ethereum’s active wallet data on IntoTheBlock shows that it is surpassing other networks in terms of growth. The figures demonstrate that Ethereum is currently in a leading position, experiencing a notable uptick in daily active wallets across both its mainnet and Layer 2 solutions such as Arbitrum and Optimism.
This surge in activity has propelled Ethereum’s share of active wallets to over 40%, driven by various factors, including the development and increasing adoption of L2 networks which have significantly contributed to Ethereum’s network usage.
Moreover, the data indicates a consistent rise in active wallets throughout the year 2024, with a substantial spike observed in early October.
Impact of Network Growth on Ethereum’s Price
Despite the significant surge in active wallets, Ethereum’s price movement has shown moderate changes. As of October 22, 2024, Ethereum is valued at $2,642, reflecting a slight decrease of 0.85% in the past 24 hours.
The price has been fluctuating within the range of $2,600 to $2,670, receiving support close to its 50-day moving average of $2,485.
While the rise in active wallets showcases ETH’s increasing utility, its price has not completely mirrored this surge in network activity. The Relative Strength Index (RSI) currently stands at 57.19, indicating a neutral market momentum that is neither overbought nor oversold.
Furthermore, the Average True Range (ATR) of 96.16 indicates a minor escalation in volatility, yet insufficient to hint at a significant price shift.
These signals suggest that despite the rising network usage of ETH, external market conditions and broader investor sentiment are exerting a greater influence on price movements.
ETH’s Price Catch-Up Game
The uptrend in active wallets underscores Ethereum’s expanding ecosystem and growing user base.
If Ethereum can sustain this progress, with ongoing adoption of Layer 2 solutions and robust staking engagement (currently over 34 million ETH staked), there is a possibility for the price to align with its on-chain expansion.
Nevertheless, despite these positive indications, ETH’s price remains cautious. Technical indicators are sending mixed signals, indicating that while Ethereum’s network is thriving, the market may be awaiting stronger catalysts to drive price growth.