A few days ago, the Ethereum price broke below its ascending channel and its valuation fell below $ 2.9k for a brief period. Since then, the largest altcoin on the market has been in recovery mode. In fact, at press time, ETH was attempting to re-enter the aforementioned channel.
Signs of revival
Most of the alt chain indicators seemed to show that the crypto was trying to deny its recent deviation from its uptrend. For starters, the intensity of the downtrend in the Price DAA model has started to fade lately. On the contrary, the same up to August 19 was quite high.
The model mentioned above, as such, describes the relationship between the performance of the currency and the number of daily active addresses that interact with it. In the past, whenever the degree of bearish has fallen, the value of the altcoin has seen a surge. You can also expect the same this time. Furthermore, net trade flows were also negative at the time of publication, indicating the resurgence of demand in the market.
The NUPL also, at the time of writing this article, stood at 0.67. While this may sound like a pretty positive sign, it should be noted that market participants tend to sell their HODLings to enjoy the accumulated profits. In fact, the same trend has been observed several times in the past. Whenever that has happened, the price of ETH has sunk most of the time.
Like Bitcoin, the current recovery phase, even for Ethereum has not been supported by the unconditional participation of market participants. However, the aforementioned trend has the potential to reverse in the coming weeks. ETH’s valuation, in hindsight, would end up witnessing a massive rally.
The magic wand DeFi
The DeFi economy, in general, continues to develop on the Ethereum network. In fact, the growth of the DeFi and Ethereum space has gone hand in hand until now.
According to Glassnode, the ETH TVL in DeFi remained at its all-time high of $ 154.8 billion on May 10. However, right after that, it saw a drastic drop and dropped to just $ 87 million. Post that, the TVL experienced constant fluctuations during the June-July phase. Needless to say, alt price followed suit.
Interestingly, at the time of this writing, the reading for this metric hovered around the same $ 154 billion range. As can be seen in the attached graph, it observed a phenomenal “W-shaped” recovery over the macro frame.
The Decentralized Finance space has undoubtedly seen significant growth since the beginning of this year. Being part of a competitive and constantly evolving space, DeFi has proven its worth. According to the State of the dApps data, the developers have successfully created more than 300 applications on Ethereum. In hindsight, the dominance of the network has intensified even further in the DeFi space.
If the aforementioned trend continues, DeFi usage is likely to see a surge in the coming weeks. And the Ethereum network will be the biggest beneficiary. When that happens, the ETH rally will be nearly unstoppable.
This is a machine translation of our English version.
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