What is ETH?

Ether (ETH) is the native token used by the Ethereum blockchain and network as a payment system for verifying transactions. ERC-20 is the standard for creating smart contract-enabled fungible tokens to be used in the Ethereum ecosystem.

$ETH is the lifeblood of Ethereum. When you send ETH or use an Ethereum application, you'll pay a fee in ETH to use the Ethereum network. This fee is an incentive for a block producer to process and verify what you're trying to do. Validators are like the record-keepers of Ethereum—they check and prove that no one is cheating. They are randomly selected to propose a block of transactions. Validators who do this work are also rewarded with small amounts of newly-issued ETH. The work validators do, and the capital they stake, keeps Ethereum secure and free of centralized control. ETH powers Ethereum.

ETH's valuable in different ways to different people. For users of Ethereum, ETH is valuable because it lets you pay transaction fees. Others see it as a digital store of value because the creation of new ETH slows down over time. More recently, ETH has become valuable to users of financial apps on Ethereum. That's because you can use ETH as collateral for crypto loans, or as a payment system. Of course many also see it as an investment, similar to Bitcoin or other cryptocurrencies.

Ethereum Shanghai Upgrade

The Ethereum network is set for a major upgrade in March. Dubbed Shanghai, the upgrade will finally release ETH staked on the Beacon Chain, but it isn’t as simple as that.

When the Ethereum network gets upgraded in March, ETH staked in late 2020 will finally be released. However, it will not happen simultaneously due to network security concerns.

The Shanghai upgrade will implement EIP (Ethereum Improvement Proposal) 4895. This enables consensus layer withdrawals for the first time since December 2020.

The Ethereum withdrawal period is dynamic and dependent on how many validators there are exiting at the time. Furthermore, validators must undergo a two-stage process to withdraw – an exit queue and a withdrawal period.

Recent News About Ethereum

The news around Ethereum and its $ETH token during recent weeks was decisively positive. The Ethereum supply has turned deflationary once more. The current supply of 120 million ETH tokens is 2,000 less than at the time of the release of Ethereum 2.0 in Sept. 2022, and the switch to a proof-of-stake (PoS) consensus mechanism. Ethereum’s on-chain fundamentals have also strengthened this year following a terrible 2022. According to the Ultrasound Money tracker, ETH issuance has fallen into deflationary territory once again. The current supply growth is -0.09% per year, it reported at the time. The Ethereum burn rate is currently around 732,000 ETH per year. The issuance rate is around 622,000 ETH annually, meaning more is being destroyed than produced.

Markets are still overall in bear territory, so Ethereum demand will likely increase as more bulls return. As gas prices increase, this will have a bigger impact on the burn rate. The result is a higher deflation rate and a shrinking supply, which is very bullish in the long term.

Ethereum value settlement is also much higher than that of Bitcoin. Industry observers have reported that this month, the settlement value for Ethereum is almost ten times more than that on the Bitcoin network.

Ethereum is possibly rising due to the upcoming Shanghai Upgrade, the next planned update for the blockchain. While the upgrade will not tackle the issues with gas fees or improve smart contracts, it will allow for the phased withdrawal of Staked ETH, which have been on the Beacon Chain for more than two years.

Ethereum ($ETH) Shark Addresses Have ‘Aggressively Grown’ Ahead of Recent Price Rise

As the price of Ethereum ($ETH), the second-largest cryptocurrency by market capitalization, surged to touch the $1,400 mark amid a wider cryptocurrency market rally, on-chain data has shown that shark addresses have been “aggressively” accumulating the cryptocurrency.

Wallets with between 100 and 10,000 $ETH, equivalent to $138,000 to $13.8 million at the time of writing, have been accumulating the cryptocurrency since early November, to the point around 3,000 new shark addresses were created. Per the firm, a total of 48,556 shark addresses now exist, marking the highest level recorded since February 2021. Shark addresses, it’s worth noting, are associated with large holders, with the largest cohort being known as the whale cohort.

(Source)

ETH Staked (+Liquid Staking) | Staked ETH Passes 16M

Almost four months after Ethereum’s successful shift to a proof-of-stake network, the second-biggest blockchain has passed another major milestone. More than 16 million ether (ETH) have been deposited into Ethereum’s Beacon Chain staking contract. The 16 million ETH figure constitutes more than 13.28% of the total ether supply and represents nearly $22.38 billion at current prices. It comes nearly two years after Ethereum’s staking contract went live in 2020, when the network’s proof-of-stake Beacon Chain was introduced.

This high amount of staked $ETH implying that it would be extremely difficult and costly to attack the network’s consensus.

Ever since the Beacon Chain was launched, Ethereum token holders have been able to stake their $ETH on the network in return for fees, awarded to them for validating transactions on the network. The funds, however, aren’t yet withdrawable. Ethereum’s mainnet merged with the Beacon Chain late last year.

To become a validator on Ethereum’s Proof-of-Stake network, users have to stake 32 ETH.

Out of the 16 million ETH staked, roughly 4.65 million have been staked through Lido – a kind of community-driven validator collective. Lido, Coinbase, Kraken and Binance, the four largest Ethereum validators, command a 55.88% share of all staked ETH, according to Nansen.

The amount of staked ETH has climbed about 16.68% since the Merge in September, when Ethereum abandoned its old proof-of-work consensus mechanism. The Merge fully transitioned the Ethereum blockchain to a proof-of-stake (PoS) consensus mechanism, which abandoned proof-of-work’s energy-intensive crypto mining process in favor of today’s staking system.

Liquid staking solutions such as Lido Finance and Rocket Pool allow users to stake significantly less and maintain their liquidity, through the issuance of tokens representing the staked funds. Lido, for example, issues stETH for every staked ETH. The prices of liquid staking tokens Lido Finance ($LDO) and Rocket Pool ($RPL) have been rallying over the past few weeks as withdrawals of Ethereum staked on the network move closer to being a reality.

Ethereum Hits 500,000 Validator Milestone

The growing number of validators points to “increasing confidence, positive market sentiment, and conviction in the Ethereum ecosystem as a whole,” the chief marketing officer at Blocknative told Blockworks A validator must deposit 32 ETH (roughly $45,000) to run a dedicated staking node on the proof-of-stake blockchain. Today, staked funds are locked in the network, and while they accrue staking rewards from Ethereum’s inflation, validators are unable to access the funds until after the Shanghai upgrade, expected to happen in March, which will allow withdrawals of staked ether for the first time.

The increase in number of active validators is a positive sign for the Ethereum ecosystem.

MetaMask Adds Ethereum Staking To Most Popular ETH Wallet

Metamask, the most widely used crypto wallet for Ethereum created by ConsenSys, announced Friday it has added Ethereum staking to its decentralized app through partnerships with liquid staking providers, Lido and Rocket Pool.

An initial list of features includes:

• Portfolio View - Multichain, multi-account view of tokens and NFTs.
• Bridges - For cross-chain transfers.
• Swaps – Allows tokens to be swapped across multiple networks.

According to the post: “MetaMask Staking allows you to engage in liquid staking with Lido and Rocket Pool, whereby you can deposit your ETH and receive a token representing the value of your stake in return.”

Price Action:

The Ethereum (ETH) price broke out from a descending resistance line. It is possible that momentum has turned bullish due to the upcoming Ethereum Shanghai upgrade. Reclaiming the $1,650 area could further accelerate the rate of increase. The Ethereum price has increased at an accelerated rate since the beginning of the year. On Jan. 11, it broke out from both the $1,350 resistance area and a descending resistance line that was in place since Aug. 2022. So far, the ETH price has reached a high of $1,611. The main resistance area is at an average price of $1,660, created by the 0.618 Fib retracement resistance level and a horizontal resistance area. A movement above it could take Ethereum to $2,000. In case of a downward movement, the $1,350 area would provide support.

Wave Count:

Like the price action, the wave count for the Ethereum price is bullish. It suggests that the ETH price is in an extended third wave (black) of a five-wave upward movement.

The sub-wave count is given in red, showing that ETH is correcting inside sub-wave four. The most likely level for the wave to end is $1,440, at the 0.382 Fib retracement support level (red). The reason for this is that wave fours are often shallow. If correct, the price could reach the area.

Therefore, a decrease below the 0.618 Fib retracement support level at $1,340 would make this count unlikely, while a drop below the wave one high at $1,244 would outright invalidate it. In that case, the ETH price would drop below $1,200.

To conclude, the most likely ETH price analysis supports an upward movement toward $2,240. A decrease below $1,244 would invalidate this price projection and suggest that the Ethereum price could fall below $1,000. The release of the Ethereum Shanghai upgrade could further increase bullish momentum.

$ETH Price Analysis

Analysis

Dashboard Introduction and Methodology

During recent weeks, the activity over Ethereum mainnet from block: 16310000 to 16420000 has increased significantly and consequently, the $ETH token price has experienced a rally from $1200 on January 1st to $1600 on January 16th.

On the occasion of this rise, I am going to check activity over Ethereum mainnet during the mentioned timespan (1st January (Block Number 16310000) - 16th January (Block Number 16420000) And especially focus on Dapps, Tokens and Protocols that were hyped during this bullean run and the users’ activity on them.

In order to just analyze the MAJOR tokens and Dapps, I have excluded those tokens and protocols that had less than certain number of transactions or active users during this time period.

In this dashboard, Firstly, I am going to define Ethere ($ETH) token and introduce its most important upcoming upgrade in the next month (Shanghai).

Then, I am going to list some of the news over this network and $ETH token during the recent months (which most of them were positive).

Then, I am going to chart $ETH price over the mentioned time period and compare its growth rate with some other top-cryptocurrencies.

Then, I am going to analyze transactions and users activity on Ethereum network and also via $ETH token over the mentioned time period.

Then, I am going to analyze the activity over major Dapps, Protocols, Tokens and check the users interatction and volume of transaction made via them.

Then, I am going to analyze the top destinations of Ethereum transactions during this time period.

Then, I am going to extract the top Dapps and Protocols and Tokens with the highest growth rate during this time period and analyze the users activity on them.

Then, I am going to check $ETH Swapping activity within Decentralized Exchanges and also its transfers activity to/from Centralized Exchanges.

In all parts, I am going to only consider Successful transactiosn for this analysis.

On the above and left charts, as mentioned earlier, we can see not only $ETH but also the majority of other cryptocurrencies including these top-rated charted tokens have experienced significant raise in their $price during the time between 1 - 16 January 2023.

So, it seems that cryptocurrency market is recovering itself after a terrible 2022 year especially during the last months because of the FTX collapse.

But dont forget that there are still some available risks in this market especially about bankrupty of other companies (such as Genesis & DCG) that can again cause a massive crash in cryptos’ price.

On the left, I have charted the % change of some of the top cryptocurrencies’ prices on 16th January vs their value on 1st January 2023.

As we see, SOL is the token with highest growth during this time period and FLOW, AAVE, ATOM, MATIC & ETH are on the next ranks.

We can see that $ETH token has experienced almost 30% growth in its price while $SOL as the most successful token (among these tokens) has experienced 134% raise on its value during this time period.

Reduced strictures of the Federal Reserve on the financial markets, including the cryptocurrency market, as well as increasing institutional investment in cryptocurrencies and DeFi projects

In recent weeks, due to the published promising statistics regarding the control of global inflation, we have seen that the strictness of the financial policy authorities towards the financial markets has gradually decreased. Also, after the beginning of 2023, we have witnessed the influx of heavy capital from organizations and companies, which almost shows the recovery of Cryptocurrency market in the new year. We also saw that the price of Bitcoin, as the largest cryptocurrency, grew from ~16,000 dollars to 21,000 dollars (at the time of analysis), which is also a very positive point for the market, because many cryptocurrencies also foillowed Bitcoin and experienced significant raise in their value during this time period.

ETH Price vs Other Tokens

According to the above data, ETH token price was equal to $1197 on 1st January but its price has raised to $1562 on 16th January. So, ETH token price has experienced almost 30.5% growth in its price during this time period.

According to the above charts, the activity over Ethereum network and also $ETH token has increased slightly during the time period between 1 - 16 January 2023. We can see the highest number of executed transactions and also active users on this network (and also via $ETH token) on 8th January and the day after that, $ETH price has increased from $1266 to $1318. The highest volume of $ETH transactions was achieved on 12th January 2023 while the $ETH price was $1404 and there is also another high spike on 14th January where the $ETH price was risen to $1535. The highest transactions fees were generated on 4th January with total 3192.376 paid $ETH.

Totally, we can say there was positive correlation between Ethereum Network and also $ETH token’s activity vs $ETH price during this time period.

Top Popular Destinations (Dapps, Tokens, Protocols, etc)

On these charts, you can see the top popular destinations of Ethereum network’s transactions during the time period between 1st - 16th January 2023 by number of transactions, users and also $volume of transactions.

As we see, USDT & USDC stablecoins (tokens) and Uniswap (decentralized exchange) and Coinbase (centralized exchange) are the most popular destinations that users in Ethereum network interacted with them during the mentioned time period.

But based on the left chart, 1inch (decentralized exchange) and Coinbase (centralized exchange) are the 2 most popular destination of Ethereum transactions based on the $USD volume of transactions.

According to the left and above charts, Uniswap (DEX), Binance, Crypto.com & Coinbase (CEXs) were the most popular destination of $ETH token users during the time period between 1 - 16 January 2023.

We can also see some other famous protocols such as X2Y2 (NFT marketplace), WETH (Wrapped $Ether Token), Sushiswap (Decentralized Exchange), AAVE (Lending Protocol) and etc during the most popular destinations of these users.

On the above charts, we can see normalized %wise share of these interacted protocols, programs, tokens, Dapps, etc based by number and volume of transactions to them.

As we see, There is almost steady and constant share of protocols which are leading and have the highest share of transactions over time. But we can see some high volatiles on the $Volume chart.

And on the above charts, we can see the normalized %wise share of these interacted protocols, programs, tokens, Dapps, etc based by number and volume of transactions via $ETH token to them.

As we see, Coinbase & Uniswap in majority of days are the most popular destination of transactions via $ETH token but we can also see Binance high spikes in some days especially on 8th January.

In this part, I have calculated the % growth rate of Ethereum protocols, Dapps, Tokens, etc transactions and active users on 16th January compared to the activity on them on 1st January 2023.

We can see Frax Finance (stablecoin protocol) and Balancer (Automated Market Maker | AMM) are the protocols with the highest growth rate in their number of transactions and active users during this time period.

the 3rd protocol that experienced the highest growth rate in this time period is Decentraland ($MANA token) which is related to the Metaverse. A possible reason for Mana's price hike is recent industry speculation about a partnership with Apple to launch a mixed-reality headset this spring. Also, the digital broadcast of the Australian Open tennis tournament in Decentraland can be another reason for the price growth of this token.

Shibaswap is also among these top-grown protocols and the possible reason behind this high growth can be because CertiK, a pioneer in blockchain security confirmed that Shiba's native decentralized exchange, ShibaSwap is on rank #1 as the DEX with the highest security!

$GALA project is also among the projects with the highest growth in this time period. Based on their twitter announcement, This project is currently working on a film with famous actors such as Mr. Dwayne Johnson and Mark Wahlberg, it is reported that these films will be on the Gala blockchain and the GALA token in Gala Film and Gala Music will be used. The market capof the GALA token has almost tripled since the beginning of 2023, and this token has shown a great performance among many altcoins in 2023. Also, this currency is included in the top 100 currencies of the Coinmarketcap website and in recent weeks It has experienced a 150% price growth. Along with the positive news coming out for the GALA project, the number of GALA transactions over $100,000 has reached a two-month high as whales drive up the price of GALA. on Below, you can see the related screenshots and achievements about $GALA project during the past weeks.

In terms of volume, we can see Alchemix (DeFi Lending Platform) is the protocol with the highest growth over this time period. Also, Voyager platform's transactions volume has increased significantly during this time period.

Binance.US to purchase Voyager’s assets, provide liquidity: Bankrupt crypto lender Voyager has been given a legal nod for the $1 billion sale of its assets to Binance.US as part of its ongoing liquidation proceedings following its collapse last year. Judge Wiles, who allowed the deal to go ahead, is set to make a final call at a future court appearance alongside a vote to be conducted by Voyager’s customers as per the liquidation plan. The activity over voyager has increased significantly after U.S. court approved that the U.S. branch of the Binance exchange can buy about $1 billion of the assets of bankrupt lender Voyager Digital.

The interesting thing is that Tornado Cash (Crypto transactions traces mixer that was sanctioned by US government few months ago) is among the projects that have experienced significant growth in its transactions during this time period !

On the above and left charts, I have analyzed the transactions and users’ activity on the mentioned top 50 protocols (with the highest growth in this time period) over time.

Similar to the activity over Ethereum network, the activity over these top-major protocols has also increased slightly with some declines during 7 & 8 January (which we have seen the highest Ethereum activity on these days!)

We can see some high volatiles on the activity over Chainlink protocol and here is a possible reason for this:

> Scallop, a regulated on-chain banking app, has integrated Chainlink Automation on the BNB Chain mainnet. This innovation now helps securely and cost-effectively trigger staking reward payouts in the Scallop staking application. Scallop is a licensed and regulated banking institution offering a comprehensive suite of innovative banking products.

On the left chart, I have extracted the top 100 tokens with the highest growth in their price during the time period between 1 - 16 January 2023.

We can also see $ETH token (orange color) with 30.5% growth in its price (rank #88) among these top 100 tokens. So, there are 87 ERC20 tokens that their price increased more than $ETH token during this time period and the top one is $XTP that have experienced massive growth (almost 2800%) in its value during this time period. The second rank belong to the $ALI token and $AGIX is on the 3rd rank.

$ETH Staking

Since we have discussed about $ETH Staking and liquidity staking especially after the announcement of Shanghai Upgrade launch date, In this part, I have analysed the activity of ETH staking during this time period.

We can see that the number and volume of ETH staking activity is increasing slightly over time with the highest number of stake transactions on 15th January and the highest volume of staked $ETH on 6th January. We can also see almost positive correlation between staked $ETH and $ETH price over time.

Also, as its visible in the above charts and also the right image, LIDO finance is by far the most popular protocol for staking ETH. (the high daily volume of staked $ETH via direct staking is because the minimum required $ETH for direct staking is $ETH and ppl who want to stake less than 32 $ETH can use the liquid staking option (such as Lido) in order to earn income from staking.

Lido is also currently now the dominant DeFi protocol based on the total value of assets locked (TVL) in DeFi.

Such a large possession of Ethereum in the hands of one organization might bring serious problems to both retail and institutional investors. Unfortunately, the problem is not only tied to the fact that Lido controls 80% of the staked supply. The issue is in Lido's liquidity and investment model. In exchange for "real" staked and illiquid Ethereum, users receive liquid stETH tokens that should be tied to the real cryptocurrency at a 1:1 ratio. However, the token is inherently worthless, considering it is just a reflection of some staked value, and in cases of volatility spikes, the existing liquidity of the asset often becomes a serious problem. It causes decoupling and serious losses among investors.

Also, As the withdrawal date for unstaking Ethereum closes in, tokens powering various liquid staking protocols are enjoying a hefty rally.

Lido Finance (LDO) and Rocket Pool (RPL), for example, have already posted significant gains over the past weeks.

$ETH Activity In DEXs/CEXs

On the left chart, I have analyzed $ETH token activity in Decentralized & also Centralized exchanges over the time period.

On the DEX chart, in all days, the sell pressure (swap from $ETH) of this token is more than its buying pressure especially during the last days of the chart.

But in the Centralized exchanges, the situation is a bit better and we can see the dominance of Outflows from CEXs in majority of days which shows users tend to hold their $ETH instead of sending them to CEXs and sell them.

on the left chart, we can see the trend line of $ETH price vs its 7 days, 30 days, 60 days and 200 days moving averages trend lines during this time period.

We can see that $ETH price trend line has successfully broken the moving average trend lines (that were acting like resistances) and on 16th January, it was above all of the mentioned moving averages which is a good news for this token.

Transactions and Users Activity

Summary and Conclusion

• According to the above analysis, the overall activity in the Ethereum network and also via $ETH token has increased slightly during the time period between 1 - 16 January 2023 and also there were more user activity during this time period on Ethereum network and also via $ETH token.

• $ETH token has experienced almost 30.5% growth in its value during this time period.

• In my opinion, the recovery of the Cryptocurrency market (including BTC as the largest crypto) and also the announcement of the Shanghai upgrade were the 2 effective positive news for Ethereum and $ETH token.

• The majority of Cryptocurrencies has experienced significant raise in their price during this time period because of the market's good situation and the also the price growth of some top-rated cryptocurrencies such as BTC, ETH, SOL, MATIC, AAVE, UNI, ATOM, FLOW & … . So, that was not only $ETH that has experienced raise in its price during this time period and seems whole cryptocurrency market is recovering after that terrible 2022 year.

• Among the ERC 20 tokens, the majority of them have experienced significant growth in their price and there were almost 88 tokens that their price has raised more than $ETH in this time period and the token with the highest growth ratio over this time period was XTP that have experienced 2800% growth in its value during this time period.

• USDT & USDC stablecoins (tokens) and Uniswap (decentralized exchange) and Coinbase (centralized exchange) were the most popular destinations that users in Ethereum network interacted with them during the mentioned time period. 1inch (decentralized exchange) and Coinbase (centralized exchange) were the 2 most popular destinations for Ethereum transactions based on the $USD volume of transactions.

• Uniswap (DEX), Binance, Crypto.com & Coinbase (CEXs) were the most popular destination of $ETH token users during the time period between 1 - 16 January 2023.

• Frax Finance (stablecoin protocol) and Balancer (Automated Market Maker | AMM) were the protocols with the highest growth rate in their number of transactions and active users during this time period. Some other projects such as GALA, Decentraland (MANA), ShibaSwap, Alchemix, Voyager, and Tornado Cash were also among the hyped projects during this time period and the main reason behind these growth was because of the hot news and annoucement around them.

• $GALA, $MANA & $SAND (all metaverse-related) were the most hyped tokens in Ethereum during this time period that have attracted the highest number of users to themselves.

• Staking Activity especially on Lido (as the most popular ETH staking pool) has increased significantly during this time period and the main reason can be the annoucement of Shanghai Upgrade in the near future (almost 1 month later) and as a result, the possibility of staked ETHs withdrawals after this upgrade. We have also seen some increasing activity and $price of liquid staking tokens such as $LDO and $RPL over this time period.

• the volume of swaps FROM ETH (Selling it) was more than the volume of swaps TO ETH (buying it) during this time period in DEXs but the situation in CEXs was better since there were more $ETH flow from CEXs than $ETH inflow to CEXs.

• There was positive correlation between $ETH price & the activity over this network and also its DeFi and Dapps ecosystem and volume of executed transactions via this token and also staked $ETH.

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And on the above charts, We can obviously see the increasing number & especially volume of transactions via $RPL and $LDO tokens and also their price growth during our time period.

Totally on the left chart, we can see that average $Price of Ethereum tokens has increased significantly during this time period and this means that the majority of Ethereum tokens have experienced massive raise in their value as well as $ETH token.

And on the left chart, we can see the correlation between $ETH price and its net swap volume.

We can say that whenever the net swap volume is higher (less-negative), the % change ratio of $ETH token is almost lower.

According to the left charts, Layer2 protocols were the most-used protocols during this time period with more than 25% share of transactions and users activity in this timespan and the next rank belongs to the DEXs.

But, in terms of volume, Dapps have by far the highest share (more than 71.2%) and DEXs are also on the second rank here.

We can also see almost constant share of these destinations over time.

According to the left charts, Layer2 protocols have experienced highest % growth in their activity over this time period but in terms of volume, Centralized Exchanges have by far experienced the highest growth in their $Volume in this time period.

On the left charts, , we can see that tokens such as GALA, MANA & SAND has attracted the most number of users to themselvers over this time period and they are all metaverse-related.