Real Vision analyst Jamie Coutts believes that Ethereum (ETH) could be on the cusp of a major rally based on several market conditions.
Coutts writes on social media platform X that there is a lot of traction in the crypto space, which could be a sign that the smart contract platform is poised for a major growth spurt.
However, the analyst warns that ETH network activity needs to increase significantly before the uptrend begins.
“As long as the conditions for a rally are forming, Ethereum will struggle to rally without resuming activity. Fees are at four-year lows.
Pros:
- Level 2 (L2) adoption has been strong, with daily active users growing by 200% over the past year.
- Global liquidity is growing.
- Stablecoin supply increases, approaching ATH (all-time highs)
- Real world asset tokenization (RWA) has grown by 70% to $11.3 billion since the beginning of the year.
On the other side:
- Some future cash flow estimates are likely to be adjusted due to lower fee expectations and the growing understanding that L2 value accumulation comes at the expense of the long-term L1 (Level 1) outlook.”
At the time of writing, Ethereum is trading at $2,761, up 4% over the past 24 hours.
The analyst also notes that revenues across the entire crypto ecosystem have declined year-on-year.
“Cryptocurrency ecosystem update on two key metrics: Active Addresses (DAU) and Fees (July 2024) 1. Aggregate YoY: DAU up 150%. Fees down 20%.”
Lower fees indicate a decrease in network activity as users are not competing as actively for transactions on crypto networks.
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