Despite the significant downturn experienced by many cryptocurrencies due to broader market fluctuations, the ethereum (ETH) network has seen substantial growth, reaching its highest level in four months. This remarkable increase has sparked speculation about the possibility of subsequent price increases.

Ethereum network demonstrates explosive growth.

According to Sanbase Pro's data, the growth level of the ethereum network has significantly increased, indicating a potential bullish trend for cryptocurrencies to become active again.

Santiment shared a detailed chart describing the price trend and network growth of ETH over the past few months, revealing a sharp increase in the number of new wallets created on the network. Typically, the rapid growth of the ethereum network is measured by the number of new addresses created on the network.

Source: Santiment

On September 8th, approximately 126,210 wallets were created on the ethereum network. Surprisingly, despite Sundays generally being the least active day of the week, the network still recorded the highest growth momentum in four months, setting a new milestone.

The sudden increase in new wallet addresses may indicate that more people are joining the ethereum network and interacting with it, which may suggest a rising utility of the network. Santiment sees this significant growth momentum as a sign of an upcoming increase in the ETH price.

Market intelligence platforms expect this surge to trigger a rebound in the ETH price from the range of $2,200 to $2,300. The price of ETH is already slightly above this range, at $2,314, but with the recent surge in network growth, its value may experience even greater momentum, setting new highs.

More than 40,000 ETH has been transferred from derivative exchanges.

In the past few trading weeks, there has been an increase in outflow of funds from derivative exchanges. Specifically, over 40,000 ETH has flowed out from derivative trading platforms such as Binance and OKEx.

From a trading perspective, when there is a significant increase in funds flowing from derivatives to spot exchanges, it may indicate cautiousness among traders, waiting for clearer definitions before making commitments. However, this is also positive, especially considering that the outflow of funds from derivatives implies an increase in inflow of funds to spot exchanges.

When there is a surge in deposits on spot exchanges, especially from derivative exchanges rather than external non-custodial wallets, the decrease in speculative pressure can support prices. As the outflow of funds from derivative exchanges increases, it suggests that there are fewer traders willing to bet on cryptocurrency prices and hold leveraged short or long positions.

From this development, the price trend in the coming trading days will be crucial. Technically, breaking below $2,100 and the August low could trigger selling, forcing more leveraged traders to shift to a holding mode and transfer tokens to spot, and possibly stablecoins.

On the contrary, if the price reverses above $2,800, it could boost sentiment and confidence, laying the foundation for further rise to $3,000 and $3,500. In turn, confidence would also increase, forcing more traders to borrow ETH from exchanges when establishing leveraged positions.

Price Outlook

A new pattern has emerged through studying Ethereum's price charts, known as a "double bottom" pattern, which has a unique 'W' structure. This technical pattern is often seen as a bullish indicator, occurring when cryptocurrency prices touch a low point, rebound, then fall and rise again around the same level.

Taking Ethereum as an example, the formation of a double bottom pattern usually indicates that the downtrend may be coming to an end. Therefore, I believe that the price of cryptocurrencies may be on the verge of a reversal. Over the past few months, the price of Ethereum has been in a downtrend characterized by intense fluctuations and price movements similar to the market trend of Bitcoin.

Ethereum has fallen by 3.59% this year. Ethereum whales may have lost interest in cryptocurrencies and have indicated that they stopped accumulating ETH in early July, instead opting to sell or reallocate their holdings.

Despite the current market trend, Ethereum is likely to experience a significant price increase in the near future. This rally could push the price of Ethereum up to $3,900.

In simple terms,

Currently, the growth level of the Ethereum network has significantly increased, indicating that the cryptocurrency will become active again and is expected to show a bullish trend. Moreover, ETH has recently formed a double bottom pattern, which is often seen as a bullish indicator, and it is predicted that the price of ETH will steadily rise in the short term. However, it is worth noting that there has been an increase in outflows from derivative exchanges recently, which may have an impact on the upward trend, but it is undeniable that it will also provide impetus for price increases. Investors should still exercise caution to guard against potential volatility.