Ethereum is bouncing back strongly: Will ETH set a new record?

Ethereum (ETH) is currently experiencing a strong bounce back in network activity, signaling renewed interest from the market. According to on-chain data, the daily transactions on Ethereum have risen to the sky, surpassing 1.2 million transactions, marking an impressive return nearly equivalent to the highs of 2021.

Source: X## Impressive network activity metrics

Data from various sources indicates that Ethereum is in a strong recovery phase, with on-chain performance metrics continuously rising. Specifically, the daily transaction volume on the Ethereum network has surged and maintained at a high level, reflecting the rebirth of ETH after a long period of lacking momentum. This growth is also occurring alongside prominent trends in the cryptocurrency market, particularly the explosion of ETH funds, stablecoins, and tokenized stocks.

The most important thing to note is that this strong rise is not random. It is a direct result of significant upgrades to Ethereum's scalability, including the Pectra upgrade. These improvements have significantly helped Ethereum enhance its transaction processing capability while minimizing gas fees, a factor that previously hindered the network's development.

According to Arjun Bhuptani, an Ethereum developer, the current gas fees are only fluctuating between 5-6 gwei, a significantly low figure compared to the fees of over 300 gwei in the past. Bhuptani did not hesitate to share:

"Daily transactions on Ethereum have nearly reached an all-time high (ATH) since 2021. We have successfully scaled the chain, and this opens up a very bright future."

Growth prospects of Ethereum

Tom Lee, the founder of Fundstrat, believes that the rising appeal of the Ethereum network will have a positive impact on the value of ETH. He emphasized:

"The utility of Ethereum rising means that the value of ETH will increase."

Lee believes that one of the important driving forces helping Ethereum rise in the future is the strong development of stablecoins. He also describes stablecoins as the "ChatGPT" of the crypto market, a key factor driving Ethereum upward and creating new opportunities.

Data from major exchanges also shows positive signals from market capitalization and interaction with stablecoins on the Ethereum network. In the past June and July, investor confidence in Ethereum has seen a significant rise, as Long positions have risen to the sky from 52% to 64%.

Source: CoinGlassHowever, despite the Ethereum network witnessing a strong bounce back in activity, there are still some significant challenges. ETH recently failed to maintain the price level of $2,600 after a rise to the sky from $2,300, and is currently trading at around $2,520. This indicates that volatility remains a difficult-to-predict factor in the market. Additionally, despite Ethereum launching ETF funds, the level of interest is still much lower compared to its counterpart Bitcoin (BTC). According to data from Ecoinmetrics, Ethereum ETF funds have only attracted about $4 billion since their launch, while Bitcoin ETF funds have raised over $30 billion – nearly 7 times more than Ethereum.

Experts believe that this discrepancy may stem from Ethereum's failure to build a clear and compelling narrative for institutional investors. Bitcoin has its own story about security and long-term value, while Ethereum still lacks a cohesive message to attract the attention of large institutions. Ecoinmetrics shares:

"Every time Bitcoin accelerates, Ethereum reacts slowly and weakly. The issue is not with accessibility, but with storytelling: Bitcoin has a clear story, while Ethereum does not."

In summary, although Ethereum is showing strong signs of bouncing back, the increase in ETH, stablecoin, and ETF funds will be factors driving the value of ETH in the future. However, to dominate the market and effectively compete with Bitcoin, Ethereum needs a stronger and clearer narrative, along with attracting interest from large institutions. With continuous improvements in technology and scalability, Ethereum still has a lot of potential to make significant breakthroughs in the near future.

Lilly