Markus Thielen, head of research at Matrixport, noted in a report this week that Ether (ETH) has broken out of the downtrend and could be heading towards $3,000 amid the recent frenzied altcoin network activity. has revived.
“Ethereum ecosystem revenue is bottoming out from a low; This could signal a potential trading bottom for ETH.”
Token Terminal data shows that Ethereum’s weekly revenue – which is income from the network’s transaction fees, also known as gas – recently rose above $30 million for two consecutive weeks, up from a yearly low. was $12 million reached in early October. Fees on the 30-day timeframe are now $112.75 million, an increase of 37.18%.
“A tactical bullish trade could be worthwhile as long as weekly Ethereum fees remain above $30 million,” Thielen added, setting a $3,000 price target based on technical chart patterns.
The bullish outlook marks a change from Thielen’s bearish stance on ETH in September, when he cited declining network revenue and user activity. Indeed, ETH in early October fell to a 7-month low, while its relative valuation to BTC fell to a 15-month low.
Alongside the massive rally in Bitcoin and the rest of the crypto market since then, ETH has gained around 20%, currently trading at $1,883.
Ether (ETH) turns deflationary
IntoTheBlock points out that the movement of capital from Bitcoin to altcoins has helped boost user activity on Ethereum, which is the foundation of many Defi and DEX protocols.
The network settled $250 billion in asset transfers last week, the highest value since the mid-March regional banking crisis and up from $105 billion at the end of August.
Due to the spike in activity on Ethereum, blockchain data shows that more ETH has been burned than added to its supply over the past week, causing the token to deflate after two months of inflation.
According to Lucas Outumuro, research director at IntoTheBlock, increased on-chain activity signals that crypto market fundamentals are improving.
