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Cryptocurrencies have been going through a rough patch over the past eighteen months, but October brought renewed hope for the market. Investors are now confident that things will soon improve. The Ethereum price has already shown signs of getting back on track, managing to exceed the $2,000 mark after securing the $1,900 support level. However, the general situation is still relatively shaky, and investors must tread carefully. After all, price drops are still possible, and while they’re not likely to be as harmful as they were in the past, they could still cause considerable financial losses.
Active supply
The active supply of both Ethereum and Bitcoin has been falling to record lows over the past year. Only 30% of BTC and 39% of ETH have moved over the past twelve months. These are the lowest levels recorded since 2017 when data collection first began. At their peak, between 2017 and 2018, almost 60% of the entire Bitcoin supply was active, changing hands between different investors.
Ether had 86% of the supply moving between 2016 and 2017, a stark difference compared to the current year. For Bitcoin, the low lows come from the anticipated halving event that is set to occur early in 2024. The number of tokens that have stayed inactive over the past three to five years is higher than ever, and transactions on the networks are also approaching a new peak.
Layer 2 solutions
Just hours after the latest Ethereum layer 2 network was launched on Monday, investors went over $30 million in Ether and stablecoins. The introduction of Blast in the ecosystem and its immediate response from the public show that there is still considerable demand for networks and other protocols based on Layer 2 solutions.
These systems operate on top of the layer 1 blockchain and help increase the speed, thereby boosting scalability and speed, all while maintaining costs within limits. The bridges are another type of blockchain-based tool that lets users move the tokens between the different networks. Another part of the appeal Blast has for investors comes from its design. ETH staking is common on the platform, and the staking yield passes to the L2 users and the decentralized applications.
Layer 2 is designed so that if you have 1 ETH coin in your wallet, the amount will steadily grow to 1.04, then 1.08, and so on, all automatically. The launch of the mainnet in February will allow users to withdraw coins from the network and participate in other on-chain activities and tasks.
$400K
The NFT market had its heyday during the late 2010s but has since entered a more dormant era of its evolution. The ecosystem was well-known even to those who didn’t know much about cryptocurrencies in the first place, primarily because the prices for a single non-fungible token could get very steep, sometimes amounting to millions of dollars.
An NFT painting depicting Ethereum founder Vitalik Buterin dressed as a court jester recently sold for 200 Ethereum coins. That is the equivalent of almost $400K at the time of the sale. Many investors saw it as a sign that the stagnant NFT ecosystem, overshadowed by the introduction of the Ordinals on Bitcoin, might soon get a boost.
The painting made by crypto artist duo Trevor Jones and the late Alotta Money broke records when it was sold at an auction three years ago, in November 2020. Back then, the price was 260 ETH, making it the priciest artwork of its kind ever sold. At the time, the value of that sale was around $140K, considerably lower than the resale of 2023.
Back when EthBoy was first minted, the creators were committed to sharing a third of the creator fees generated by future sales but with the first buyer of the piece. The initial owner, known under the pseudonym MaxStealth, can expect to receive $13,000 in ETH soon as part of their creator fee.
Wrapped Ethereum
Wrapped ETH coins are a way to create interoperability between either blockchains or different decentralized applications. They enable the systems to facilitate trading and exchanges across other platforms, fostering the perpetuation of decentralized solutions. WETH can also be converted back into Ether by sending the coins to the smart contract. The wrapped Ether is burned, releasing the equivalent amount of Ether.
But is Ethereum a good investment? The answer is the same as for any other cryptocurrency since it largely depends on the individual circumstances and your tolerance for risks. Wrapped Ether can be traded for fiat currencies and other digital coins, and many exchanges offer considerable liquidity on over 200 different trading pairs. You can also purchase the coins with a credit card, but remember that this is still crypto.
The market conditions can change quickly, so it’s always a good idea to research.
Bullish rally
The crypto environment has been steeped in the influence of a bear market for a long time, so the beginning of a bullish rally has been highly anticipated and very much awaited by investors who want to see gains. Many important cryptocurrencies, including Bitcoin and Ethereum, enjoyed a period of growth, but many are wondering what will happen when the bull rally reaches an end. Some believe that, as of November 20th, the price has entered a new stagnation period.
In fact, some analysts believe that the bullish rally ended over a week before this date. The total crypto market cap currently stands at $1.4 trillion. Bitcoin performed very well, exceeding expectations for many by climbing roughly 30% in October. However, the altcoins had their time in the sun as well. Ethereum climbed by more than 25%, going above the $2,000 milestone. The number of transactions, as well as the overall transfer volume, have dropped, signs that have caused worry among investors.
However, the demand in the derivatives market remains unaffected. The Funding Rate for Ethereum remains green, showing investors are buying the same tokens for lower prices overall.
To sum up, the crypto market is still recovering from its slump and consolidating from the gains. The possibility of a downtrend is still realistic, but most investors hope that the market will remain buoyant.
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