After Bitcoin, the top-ranked altcoin, Ethereum and the rest of the altcoin category have not yet reached a new all-time high beyond the highs set in late 2017 and early 2018.
Early signs that Bitcoin’s bull market was brewing were sparked by a slow and steady surge in BTC address activity, and now that trend is continuing in ETH wallets. Wallet activity has now reached levels not seen since the DeFi surge this summer. But what exactly does that mean for the second-placed cryptocurrency?
Ethereum address activity returns to 2020 highs, Ditches DeFi Bandwagon
The cryptocurrency asset class was created with the advent of Bitcoin, and since its inception an entire market has accumulated with thousands of coins.
As if the fundamental analysis were not challenging enough compared to conventional assets, the procedure for each cryptocurrency varies fundamentally depending on the application.
Related reading | The entrepreneur calls Ethereum Silver Bitcoin as digital gold and not as Litecoin
Bitcoin is quite straightforward compared to others, as acceptance can be measured using BTC wallet activity and blockchain transaction behavior. As more users hold BTC and remove it from the exchanges, not to them, the price of digital scarce wealth will increase exponentially until those users are ready to sell again.
This basic formula for predicting adoption – and possibly price – is slightly different for Ethereum. Wallet activity does play a role, but due to the smart contracts of the asset and decentralized applications like DeFi, Dapp usage, total value locked in applications and other metrics, the long-term valuation of the altcoin also plays an important role.
The active ETH mentioned has the DeFi summer summit in August | revisited source: glassnode.com
When these DeFi-related metrics exploded for the first time in the summer months, active ETH wallets hit a two-year high. Now these active addresses have reached a similar milestone, even without the supporting DeFi train booming.
Surging activities are great for adoption, but what does this mean for the Ethereum price tag?
Crypto Market Cycle: Could Top Altcoin Finally Catch Bitcoin?
Ethereum is currently trading above $ 600 and is more than 50% away from its all-time high of $ 1,400 at the start of 2018. The altcoin market peaked almost two to four weeks after Bitcoin, as profit from the cryptocurrency ranked highest in altcoins and eventually in cash.
Not only did Bitcoin set a new maximum price in 2020, but the cryptocurrency is currently more than $ 3,000 higher than its previous all-time high, even after a correction of over $ 1,000.
Sure, Bitcoin has played a catch-up game. Next, Ethereum could catch up and track the trajectory of the top cryptocurrency.
Could this surge in activity cause Ethereum to finally catch up with Bitcoin? | Source: ETHUSD on TradingView.com
Just like the activity of the BTC wallet address increasing in front of real interest and the familiar FOMO feeling of returning to Bitcoin, the same increase is happening in Ethereum.
Related reading | This bearish chart pattern could lower the market cap for Crypto Altcoin by 50%
A surge in wallet activity over the past month even helped the crypto market’s biggest laggard, XRP, soared in a 200% rally. If Ethereum can do a similar feat, a rally of more than 200% is exactly what the altcoin needs to propel it towards previous peak prices and potentially set a new record, just like Bitcoin.
And because, as the summer months have shown, with the start of Ethereum, Altcoins – especially DeFi tokens – also start moving. Is this also the catalyst for an upcoming altcoin season?
Featured image from deposit photos, charts from TradingView.com
