Ethereum transactions have never been higher since the very peak in January 2018 as demand for the ethereum network appears to have returned to a full swing.
1,150,000 transactions were performed on Monday, while the peak stands at 1,350,000 transactions on January the 4th 2020.
Around that time ethereum’s price reached $1,420, while for some weeks now it has been trying to overtake $250.
That huge resistance line at $250 comes after more than a year of sideways both against the dollar and against bitcoin, after falling considerably against both.
The transaction levels were also kind of sidewaying for that period, but they have been in a bull run for much of this year since January 2020.
As transactions can be a proxy for adoption, you’d expect their rise to be reflected in the price, but it is not too clear whether they are a lagging indicator or otherwise.
Logically you’d expect people to get eth first and then transact, but the transaction itself can of course be the process by which they get the eth.
Moreover many of these purchases happen on centralized exchanges, so a transaction can be a withdrawal of eth to a cold wallet after a decision is made.
Much activity is of course for dapps, but for simple transactions their rise can potentially be a leading indicator with price lagging perhaps due to bots and other factors that make reflection of demand and supply less than instant or at least slower than the blockchain.
That’s especially the case for Over the Counter (OTC) purchases which may take time to be reflected as lower supply in the market, so potentially making transactions a leading indicator.
Either way, we will know soon enough whether this bull run in transactions will be reflected in the price, with ethereum fees remaining very low, although rising now to 30 cent for a next block simple transaction.
Miners in ethereum can increase capacity, unlike in bitcoin, with contract level scaling making their way through implementation as well, so ethereum now is kind of beginning to be ready-ish for the next wave, if there is one.