Ethereum On-Chain Analysis 27-31 December 2021

Interest in DeFi keeps Rising

The total value locked in Defi products(blue) has been steadily increased since the beginning of March 2020. This makes sense intuitively since the ETH price(black) has increased throughout this period. Likewise, TVL has mirrored the price movement of ETH, with both reaching an ETH on May 21.

While the ETH price hasn’t quite reached a new ATH <TVL has already done so. Value locked broke through ATH at the end of August and proceeded to reach a new high on Oct 21 with $239 billion locked in Defi products.

Despite the temporary stagnation in the price of ETH, the interest in Defi products has not waned.

Ethereum On-Chain Analysis: 27/12/21-31/12/21
Ethereum On-Chain Analysis: 27/12/21-31/12/21

Uniswap Transactions

Uniswap is one of the largest Defi exchanges, and its transaction peaked during the May ATH ETH price. The reaction after the May/June drop has been the opposite of TVL. Further, the transaction count continued to fall until it reached a new yearly low in September.

While the value has rebounded some since it’s only around 100,000, considerably below the 250,000 highs of May.

ETH 2.0

The number of accounts with more than 32 ETH has increased since July. This number is the criteria since it’s the minimum amount required to become a validator for ETH 2.0.

Ethereum On-Chain Analysis: 27/12/21-31/12/21
Ethereum On-Chain Analysis: 27/12/21-31/12/21

This is of greater significance when combined with many transactions on the ETH network. Since the May ATH, the number of transactions has been decreasing and created a lower low in September. Which somewhat mirrored Uniswap transactions but at a more gradual rate.

ETH is mainly used to stake within the anticipation of ETH 2.0 or in the Defi sector instead of for trading.

Ethereum On-Chain Analysis: 27/12/21-31/12/21
Ethereum On-Chain Analysis: 27/12/21-31/12/21

**Nothing in this article is financial advice, and you should only invest in the market you believe is suitable for your portfolio.

Naveli Sharma
Naveli Sharma

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