Ethereum on fire: User surge is driving a massive surge in activity

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Ethereum activity on-chain has skyrocketed, driven by a wave of fresh users and greater transaction flow on the network. According to Glassnode, the number of retained fresh activities has roughly doubled this month – from around 4 million to around 8 million addresses – indicating that a fresh cohort of wallets is interacting with Ether and not just repeat users.

Increase in the number of fresh users

On Thursday, the daily number of transactions reached a record high of 2.8 million, an boost of 125% compared to the same period last year. Etherscan reports that the number of dynamic addresses has more than doubled year over year, from around 410,000 accounts to over 1 million as of January 15. These numbers suggest that real, broad-based engagement is growing, not just short-term spikes.

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Transaction boom and L2 effects

Followers connect transaction growth partly due to increasing stablecoin activity and lower fees. Reports have revealed that many transfers move execution to the Layer 2 network, while settlements remain on the Ethereum mainchain, ensuring security of finality and helping reduce gas costs. Staking also increased, reaching almost 36 million ETH, another level of the network’s increasing supply dynamics.

At the same time, market behavior remains cautious. Strength in the USA shares has helped stabilize cryptocurrency prices, but the money flowing into Ethereum looks selective rather than broad.

The positioning seems to be rather conservative; investors prefer to wait for more exact ETH price signals rather than trying to predict a breakout. In turn, ETH is consolidating around the correction, but there is not enough momentum-driven buying.

Ether trading at $3,310 on the 24-hour chart: TradingView

Analyst views and price movement

There were also those who cited optimism resulting from the improvement of the chain’s foundations. For example, LVRG Research reported that the growing number of trading and staking activities is encouraging positive networking.

Some investors say that compression in price action may precede a breakout. Ether traded at a two-month high of $3,400 on Wednesday and was trading around $3,300 in early trading on Friday, reflecting a tug-of-war between renewed demand and continued caution.

Despite improved metrics, technical hurdles remain. Reports and the latest analyzes suggest that the market is in a recovery phase, not a confirmed upward trend.

Overall supply continues to limit sustainable progress, and many market participants want to see that happen ETH regain key long-term resistance levels, such as the 200-day EMA, before committing large-scale capital.

This explains why short-term traders operate in a certain range while long-term traders hold back.

What does this mean for traders and investors

The health of the network has improved significantly – more users, more transactions and higher rates – but the price action has not yet matched these benefits.

Based on the data presented, cautious optimism is justified. Traders may find an opportunity to trade this range, while investors looking for conviction should wait for clearer technical confirmation before betting on a sustained upside.

Featured image from Blockzeit/EthBurn, chart from TradingView

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