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Ethereum saw a brief bounce, which pushed its price above the $2,000 mark, but this upward move seems lost its momentum and has fallen below the level. Amid this, ETH’s price bounce on Tuesday comes a notable spike in the network’s on-chain activity and the creation of new wallet addresses.

Ethereum Activity Spikes to Historic Levels

Even though the broader cryptocurrency market appears highly volatile, Ethereum investors are moving against the current trend and exhibiting renewed bullish sentiment. This renewed euphoria toward the leading altcoin is shown by a sudden wave of fresh investors entering the market each day.

Santiment, a popular market intelligence and on-chain data analytics platform, took to the X platform to share this rise in network activity amid a brief bounce. Ethereum’s price has briefly increased, and a more interesting narrative is now developing beneath the surface.

As ETH attempts to stabilize above the $2,000 level after recent volatility, bulls and bears are currently battling over whether the resistance will be breached in the long run. In the meantime, on-chain data indicates a significant increase in user involvement, which shows a historic spike in the creation of new wallets and total network activity.

Using the 30-day averages, there has been an increase in fresh addresses and network activity on a daily basis. The chart shared by Santiment shows that there are over 837,200 active ETH wallet addresses per day, representing more than 80% rise in comparison to 5 years ago. 

When compared to 10 years ago, this figure marks an over 1,135% spike. The increase in new addresses may indicate new funding, a resurgence of interest, or the reactivation of previously excluded players joining the ecosystem.

In terms of new Ethereum wallet addresses, there have been over 284,800 created per day. This number represents a +64% uptick compared to 5 years ago and a more than 1,967% increase compared to 10 years ago. A steady increase in wallet creation often signals deeper network usage and growing popularity, which may trigger a larger price surge.

A Historic Pattern Unfolding On The ETH Chart

Despite the bearish market conditions, Ethereum is forming a key pattern that would flip the altcoin towards the upside. According to Coinvo Trading, a full-time crypto trader on X, the impending ETH move “is going to shock the entire world.”

After examining the altcoin’s performance on the weekly time frame, Coinvo Trading highlighted that the same Rainbow pattern that occurred in previous cycles before every major ETH rally has returned. When ETH retests the middle of the Rainbow chart, the altcoin usually blows up.

The altcoin is currently retesting the same level after hitting it once more. Should history repeat itself, ETH could be set for one of its most significant rallies. While investors are sitting on the sidelines waiting for a sign of an upswing, the expert stated that this repeating rainbow pattern is the signal they have been anticipating.

Featured image from iStock, chart from Tradingview.com

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Bitcoin’s price shook off last week’s dip and climbed sharply on Tuesday morning in Asia, topping $110,000 briefly before settling around $109,450. Traders rushed back in after the asset dipped close to $100,000, feeding a sharp rebound that leaves Bitcoin just 2.8% shy of its record high.

A blend of forced liquidations, surging derivatives volume, easing US–China trade tensions and steady on-chain withdrawals is driving the move.

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Heavy Liquidations Shift The Balance

According to Coinglass, nearly $203 million in Bitcoin positions were wiped out over the past 24 hours. Of that, $195 million were against shorts. When so many short bets unwind at once, it forces buyers to cover positions, which can send prices spiking. Yet history shows these “short squeezes” can reverse quickly when traders take profits.

Based on reports, Bitcoin’s derivatives volume more than doubled, climbing over 110% to $110 billion. Open interest then followed suit, expanding 7.3% to almost $77 billion.

These kinds of inflows indicate that new money is accumulating. Both open interest and volume rising tends to indicate enthusiasm—and a willingness to carry through positions with swings.

Trade Diplomacy Lifts Risk Assets

Talks resumed in London on June 9 between the US and China over tariffs and export rules. Even a hint of progress tends to boost appetite for riskier assets, and Bitcoin isn’t immune.

Headlines of smoother trade ties lifted equities earlier this week—and crypto traders moved in tandem. If negotiations hit a snag, though, Bitcoin could slide with global markets.

On-Chain Data Shows Steady Accumulation

CryptoQuant’s numbers reveal that centralized exchanges have shed 550,000 BTC since July 2024, falling from 1.55 million to about 1.01 million today. As coins leave exchanges, float tightens. At the same time, the Coinbase Premium indicator rose, with US buyers paying more than overseas investors.

Santiment also reports renewed accumulation among wallets holding 10–100 BTC. This pattern hints at long-term holding rather than quick trades.

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Correlation And Caution Remain

When you consider the rally, Bitcoin still dances on the tunes of equity price swings. Futures have mixed bets between bulls and bears, showing portrait-wise signs that certainly not everybody is convinced this run is going to hold.

High volatility would tend to wash out weak hands at the slightest hint of trouble, any reversal of risk sentiment, or a sudden macro shock would cost the rally dearly.

Optimism is building as analysts talk of fresh all-time highs. Some even eye $150,000 by the end of the year if US debt levels climb further. But sustaining a rally of that magnitude will require more than forced liquidations.

Traders will watch derivatives flows, on-chain reserves and trade headlines for signs of real, lasting demand before pushing prices much higher.

Featured image from Imagen, chart from TradingView

On Friday, a large number of Bitcoin options and Ethereum options are expiring in what seems to be a tight fight between the bulls and the bears. Interestingly, a day before the expiry both – BTC and ETH entered a strong rally gaining 7% and 10% respectively.

Bitcoin Options Expiry

As per the data from Deribits, a total of 32,000 BTC options contracts are set to expire today with a put call ratio of 0.71. The notional value of the expiry is $1.943 billion while the max pain point of $60,000.

The Yen rate hike last week induced severe volatility in the crypto market with the Bitcoin price dropping under $50,000 earlier on Monday. However, the Bank of Japan suggested a softer stand going ahead if the market instability escalates. This led to a strong recovery in the last four days, with BTC surging sharply by 20% currently trading at more than $61,000 levels.

Also, the implied volatility has decreased to a great extent but still remains higher than the pre-crash levels. The ongoing market volatility makes it challenging for IVs to decline rapidly over a short period.

The Grayscale Research report notes that if the US economy avoids recession and manages a “soft landing,” the token valuations can rebound with Bitcoin testing its all-time high levels by the end of the year. Besides, the report also noted that there is little tolerance for a deep economic recession and the Fed could pivot soon to rate cuts on the first sight of trouble.

Also Read: CBOE Resubmits Bitcoin ETF Options Trading Application, Q4 Approval Likely?

Ethereum Options Expiry

A total of 206,000 ETH options are set to expire today with a put-call ratio of 0.96, a notional value of $560 million, and a max pain point of $2,950. The put-call ratio close to 1 shows that it’s a tight fight between the bulls and the bears.

In the last 24 hours, the Ethereum price has witnessed a strong rebound jumping 10.70% and shooting at the way to $2,700. As per the technical charts, ETH can further extend a rally to $2,820.

#Ethereum forms a bull pennant on lower time frames, indicating a potential rise of over 4% towards $2,820! pic.twitter.com/EHp4XwBF3F

— Ali (@ali_charts) August 9, 2024

The Ethereum ETFs were showing major strength during the market collapse, however, have been seeing outflows as the market revived in the last two days.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.