Ethereum Price News: Weekly Transactions Rise By 40% – Is ETH Ready to Explode?

Ethereum (ETH) has gone up by nearly 6% since the year started. Although it has lagged behind Solana and XRP in terms of performance during this period, on-chain data shows that network activity is rising rapidly.

According to data from Artemis¹, Ethereum’s weekly transactions have surged from 10 million in mid-December to 14 million as of last week, resulting in a 40% increase in usage.

However, DEX volumes have actually been trending lower since late September, implying lower usage of Ethereum’s DeFi applications.

This divergence can be explained as follows: users are increasingly transferring assets through the Ethereum network, but are not necessarily interacting with dApps. This could be the result of higher payment volumes.

In any case, higher transaction volumes are bullish for ETH as this means that demand for this token is increasing.

Traders’ Interest in ETH Futures Increase Near Recent Peaks

Trading volumes for ETH remain high at nearly $20 billion in the past 24 hours alone. This figure accounts for 5% of the token’s circulating market cap – a healthy level that points to an active market.

In addition, open interest (OI) in ETH futures has also been steadily increasing. This signals higher speculative action and trader participation, which is also an early indication that market sentiment is recovering.

According to data from CoinGlass², OI has expanded from a recent low of 10.9 million ETH in October to a local peak of 13.4 million ETH during the first few days of January.

Back when ETH rose near $5,000, OI was standing at around 14.2 million ETH. We are not too far from that mark. Hence, some degree of FOMO is starting to kick in.

Ethereum Needs to Stay Above $2,800 to Get Another Shot at $5K

We have been tracking Ethereum’s weekly chart for a while and have identified some pivotal levels for the token.

ETH/USD Weekly Chart (Bitstamp) – Source: TradingView

The $2,800 is still the key structural support to watch. ETH has managed to stay above this mark, and this bounce coincides with the rise in transaction volumes cited earlier.

We envision a move to $3,900 if bullish momentum picks up steam, but we have not yet seen any concrete signals that this is the case.

The Relative Strength Index (RSI) has to rise above the 14-period moving average to confirm a buy signal, in which case ETH may start its journey to this key area of resistance. This would imply a 24% upside potential in the near term, for starters.

That said, if we get a bearish breakout below this mark, ETH could drop by around 42% to $1,600. This is in line with how bearish crossovers below the 100-week EMA have resulted in the past, but there have also been instances in which the move has been a false positive.

In such cases, bear traps have ended up propelling the token to higher highs. Hence, we have these two scenarios on the table. For now, the odds favor bulls unless a break below $2,800 occurs.

Meanwhile, $3,900 is a conservative target, as these same historical patterns support a move to $5,000 at least if positive momentum accelerates.