The Ethereum (ETH) blockchain network is seeing suppressed price growth today in tandem with the general market outlook. The second largest digital currency by market capitalization saw its price drop by 3.01% over the past 24 hours to $1,846.85. The current bearish slump is, however, sutured by the marginal 0.62% gain over the past week.
Pointing to the state of the Ethereum network at this time, crypto market analyst @Ali_Charts made reference to Glassnode's data to show how the protocol has now increased active users, transaction volume and blockspace demand. He noted that all of these indicate healthy Ethereum network adoption.
#Ethereum | Increased active users, transaction volume, and blockspace demand indicate healthy $ETH network adoption.— Ali (@ali_charts) May 1, 2023
However, the monthly average of active #ETH addresses has been rejected by the yearly average, suggesting weak network fundamentals and reduced utilization. pic.twitter.com/c5Lsl7hhmf
This is notably a bullish tick for the Ethereum protocol, but the price action at this time is not showing the true impact of these impressive network fundamentals. Explaining why this may be so, the analyst said ETH is also seeing a rejection in the total number of average active users in the network.
According to him, this suggests weaker network fundamentals and reduced utilization. With reduced utilization, the total number of users demanding Ethereum is also correlatively reduced, showcasing as slowing price gain.
Ethereum and hope for dominance
The price of Ethereum is just one metric to show the dominance of the blockchain protocol. For what it's worth, the blockchain network and its ecosystem remain the most important in the industry today.
The emergence and continuous evolution of Layer 2 protocols is a testament to the growing commitment to building the inherent utility surrounding the blockchain. While not directly a beneficiary of technological advancement in Polygon zkEVM, Optimism and Arbitrum, among others, it is definitely an indirect beneficiary.
The growth and impressive performance of these L2s broadens the attractiveness of the underlying blockchain protocol which, in turn, is a major win for the entire blockchain and Web 3.0 ecosystem.