The increase in activity on the Ethereum network has led to a drop in the supply of ETH to the lowest since August 2022
The number of active addresses and the volume of transactions reached an annual peak
At the end of last week, activity on the Ethereum network showed significant growth, and several on-chain indicators set highs over the past 12 months. So, on March 17, the number of active and new Ethereum addresses jumped to an annual maximum at 563,550 and 121,800, respectively. In addition, on the same day, the daily volume of transactions exceeded $ 7.2 billion.
By the middle of last week, according to the CryptoQuant analytical platform, the ETH supply reached its lowest since August 2022. On September 15, 2022, the Ethereum network, as a result of The Merge hard fork, switched from the Proof of Work (PoW) consensus algorithm to Proof of Stake (PoS), and also introduced a mechanism for burning coins paid as transaction fees, which made ETH a deflationary asset.
Currently, the rate of decline in ETH supply has reached its maximum since May last year. Over the past 30 days, the supply of the asset has decreased by 0.8% year-on-year, whereas immediately after the update of The Merge, the indicator was only 0.246%.
As explained by Julio Moreno, head of research at CryptoQuant, the increase in activity on the Ethereum network led to an increase in transaction fees and, consequently, increased the amount of burned ETH paid as commissions. He added that the number of daily transactions has peaked since May 2023. Thus, the 7-day moving average (7DMA) reached 1.26 million on March 17.
