The Ethereum network has been placed under immense strain in recent months, with the ongoing DeFi trend driving massive demand to the network as traders begin utilizing decentralized exchanges and providing liquidity to various protocols.
Although network demand has been sliding lower as the mania surrounding DeFi subsides, gas prices are still significantly higher than they have been in the past and often see wild swings that can make it impractical to use the network.
Despite the recent inflows of network demand highlighting the need for better scaling – which is widely thought to be coming later this year when ETH 2.0 begins rolling out – it has rocked some investors’ faith in ETH’s long-term outlook.
Nevertheless, one analyst is noting that three primary factors are revealing just how fundamentally strong the cryptocurrency and its network truly are at the moment.
The vast majority of Ethereum’s supply hasn’t been moved in over a year
Despite all the activity on the Ethereum blockchain, the vast majority of ETH tokens being held by investors haven’t been moved in over a year.
This is an incredibly positive sign that indicates long-term investors are not keen on selling their tokens anytime soon, as the vast majority of the coins that have been held for over a year were not sold even when ETH’s price hit highs of $490 a couple of months ago.
One Ethereum community member observed this trend, saying:
“~60% of all ETH hasn’t moved in 1+ years. With eth2 phase 0 approaching, it’ll be interesting to see how much this percentage comes down by as Ethereum OG’s move their stash into staking.”
Data Source: Glassnode
These 3 factors show just how healthy ETH is
Other factors point to the fundamental strength of the Ethereum blockchain at the moment, with one analyst noting that it has “never been healthier.”
He specifically points to the daily total of USD fees being paid, the number of contract calls seen since September, as well as the daily active address count.
“L1 Health — long term fundamental indicators show Ethereum has arguably never been healthier. 1. ETH now dwarfs BTC in daily total USD fees paid 2. 115m contract calls in Sept, up from 57m in June 3. Daily Active Addr consistently over 400k.”
Although Ethereum’s price has been stagnant in recent times and closely tracking that of Bitcoin, the confluence of these multiple fundamental factors does seem to indicate that its mid-term outlook remains incredibly bright.