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A few days ago, Ethereum’s price fell below its ascending channel and its valuation slid below $ 2.9,000 for a brief period. Since then, the biggest altcoin on the market has been in recovery mode. In fact, at the time of going to press, ETH was attempting to re-enter the aforementioned channel.
Signs of renewal
Most of the chain’s alt indicators seemed to show that the crypto was trying to reverse its recent deviation from its uptrend. For starters, the intensity of the decline on the Price DAA pattern has started to fade lately. On the contrary, the same until August 19 was quite high.
The aforementioned model, as such, describes the relationship between the performance of the part and the number of daily active addresses that interact with it. In the past, whenever the degree of decline fell, the value of altcoin experienced a pump. We can expect the same this time around too. In addition, net trade flows were also negative at the time of going to press, indicating the re-emergence of demand in the market.
Source: Glassnode
The NUPL also, at the time of writing, stood at 0.67. While this may sound like a pretty positive sign, it’s worth noting that market participants tend to sell their HODLings to savor their accumulated gains. In fact, the same trend has been observed several times in the past. Whenever this has happened, the price of ETH has most often fallen.
Much like Bitcoin, the current recovery phase, even for Ethereum, has not been supported by the full participation of market participants. However, the aforementioned trend has the potential to reverse in the coming weeks. The valuation of ETH, in retrospect, would eventually witness a massive upturn.
The DeFi Magic Wand
The DeFi economy, on the whole, continues to rely on the Ethereum network. In fact, the growth of the DeFi space and Ethereum have gone hand in hand so far.
According to Glassnode, ETH TVL in DeFi hit an all-time high of $ 154.8 billion on May 10. However, right after that, the same took a drastic drop and fell to as little as $ 87 million. After that, the TVL experienced constant fluctuations during the June and July phases. Needless to say, the price of alt has followed suit.
Interestingly, at the time of writing, this metric reading hovered around the same $ 154 billion range. As can be seen from the attached graph, the same noted a phenomenal “W-shaped” pickup on the macro frame.
Source: Glassnode
The Decentralized Finance space has undoubtedly recorded significant growth since the start of this year. Being part of a competitive and constantly evolving space, DeFi has proven its usefulness. According to data on the state of dApps, developers have successfully created over 300 applications on Ethereum. With the benefit of hindsight, the dominance of the network 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 almost unstoppable.
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