Remarkable network activity and institutional investment have transformed Ethereum into a truly vibrant and renewable force. The surge is so pronounced that nearly all the incoming elements—from new projects to institutional investments—are creating an estimated 80–90% deflationary pressure on Ethereum. Under normal circumstances, this would be an excellent time to buy Ethereum, as the price is bound to go up with inflating demand and deflationary supply. Explosive Growth in Ethereum Transactions and Active Addresses The exponential growth of Ethereum’s scaling solutions—Arbitrum, Optimism, and Base—has been nothing short of stunning. Over the past few months, these networks’ transaction volumes have surged by more than 300%. Increased user adoption and increased protocol activity across these networks are the primary drivers of that growth. This is all super bullish for Layer 2 Ethereum solutions, and consequently—or, more accurately, synchronously—it’s bullish for the Ethereum network itself. The truth? Yes. Data from @intotheblock shows that the number of transactions on ETH; Arbitrum, Optimism and Base have been on a ridiculous uptrend, over 300% Also, active addresses on @coinbase since July 2024, has gone from 500k to a high of over 2M There is potential pic.twitter.com/QIVow06mvN — Mijosh.₿ (@Mijosh_) February 4, 2025 A notable trend is the increase in active addresses on Coinbase. Since July 2024, the number of active addresses on the exchange has surged from 500,000 to more than 2 million. This isn’t just growth for Coin base; it suggests that the Ethereum ecosystem is seeing robust user engagement. Reasons for this growth could include: improved network efficiency, the broader adoption of decentralized applications (dApps), and, last but not least, institutional investment in the Ethereum space. The most important support level for #Ethereum is between $2,238 and $2,614, where 12.18 million wallets acquired 63.07 million $ETH . pic.twitter.com/HggTaqfE4y — Ali (@ali_charts) February 5, 2025 Key Support Levels and Institutional Investment in Ethereum From an on-chain perspective, Ethereum’s most critical support level is between $2,238 and $2,614. At this price range, a total of 12.18 million wallets hold 63.07 million ETH, amounting to a strong concentration of on-chain holdings. Roughly 5.33 percent of all Ethereum that exists is concentrated in this top price support level. A dip into this range would likely be met with a wave of buying, as these holders likely see themselves as “in the money.” Thus, this price concentration provides a solid buffer against further declines for Ethereum’s price, should it reach this region, making it a sort of price floor for the asset. Ethereum’s institutional demand has been building consistent momentum. On February 4, Ethereum spot ETFs recorded a net inflow of $308 million, marking the fourth consecutive day of seeing positive inflows. The sustained interest in Ethereum ETFs seems to indicate that large financial players are increasingly valuing ETH as a valuable asset. This is not much different from the institutional adoption narrative that Bitcoin has seen play out over the last couple of years through similar vehicles. On February 4, Bitcoin spot ETF had a total net inflow of $341 million yesterday, and BlackRock ETF IBIT had an inflow of $249 million. Ethereum spot ETF had a total net inflow of $308 million, continuing its net inflow for 4 consecutive days. https://t.co/59u0BnDSW8 — Wu Blockchain (@WuBlockchain) February 5, 2025 Conclusion The network of Ethereum is expanding like never before. The number of transactions occurring on Ethereum, as well as on its Layer 2 networks, has never been higher. Meanwhile, Ethereum has been enjoying a resplendent price range of between $2,238 and $2,614. It appears that investors have long seen the Layer 1 protocol and Layer 2 solutions as being worth their salt for a long time to come. As demand from institutions continues to surge and Ethereum ETFs bring in new investment, the future of Ethereum looks promising. The network has not only continued to scale but also seems to be much closer to achieving status as a “world computer” that can handle anything thrown at it, with adoption expanding at a steady pace. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news ! Image Source: dusanzidar/ 123RF
