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Ethereum DeFi activity at record high, price approaches ATH



The Ethereum price is recently approaching the last all-time high. Apart from the technical analysis, the on-chain data also shows us that the ETH price could soon rise above its last all-time high.


There is bullish news for Ethereum : The number of ETHs on exchanges reached a new all-time low, while the number of ETHs that are in smart contracts or in the DeFi market has reached a new all-time high. This trend could continue and have a positive effect on the Ethereum course .


Ethereum activity hits record levels

On the chart below you can see that the number of ETHs on the Exchanges (the black curve) has fallen continuously since mid-2020 and recently reached a new all-time low. That is an extremely positive sign. On the one hand, this shows us that investors are convinced of Ethereum because they don't want to sell it (on the exchanges). On the other hand, it reduces the available supply on the market. So if the trend continues, the ETH price will theoretically continue to rise despite constant demand.


The blue curve represents the percentage of ETH that is in smart contracts. This number has almost doubled since the beginning of the year (around 15%) (currently: around 27%). This trend is another indication that Ethereum is generally doing well.



The crypto analyst Croissant explained on Twitter why that is so: A large part of the Ethereum that is used for smart contracts work in DeFi applications and thus create real value. Of these around 27%, 77% are “lured” in the DeFi area, ie they are stored there and cannot initially be deducted from it. Around 24.5 million ETH (at the current Ethereum rate that is 110 billion USD!) Are currently working in the emerging crypto market sector.


The crypto Investor Raoul Paul commented on the contribution of the analyst as saying: "Great thread and I agree wholeheartedly."


DeFi-TVL at record level


According to the DeFi tracker DefiLama , the DeFi-TVL (Ethereum-DeFi and the rest together) is currently only slightly below its most recent all-time high ($ 276.5 billion). In addition, since the beginning of October ($ 193.5 billion), this value has increased by approximately 40%. The increase is of course also due to the fact that crypto prices have risen sharply since the beginning of October - the Ethereum price , for example, has increased around 40% since October 1, 2021.


However, the DeFi market itself has also grown. In a news article we recently published , we already wrote that the number of DeFi addresses rose to over 4 million, which is a new all-time high. According to the source data of the news article, the number of active DeFi addresses on October 1 was 3.4 million (i.e. + 17%) and was 8 times as small at the beginning of the year. So one could argue that the increase in TVL is also due to the growth or development of the DeFi market itself. Anyway , Ethereumbenefits from the emerging new finance sector (and vice versa). ETH is more than just a cryptocurrency - it is a platform for cryptocurrencies. Should Ethereum be able to defend its position as market leader , then the booming DeFi market could push the ETH price up even further in 2022.


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