Ethereum’s Network Growth Soars in December, Yet Price Remains Stagnant

Ethereum is experiencing one of its most significant increases in network growth this month, with a notable jump in the creation of new wallets. However, despite this surge of new users, the price of ETH is still trapped in a narrow trading range, highlighting a disconnect between strong on-chain data and market sentiment.

Key Takeaways

Ethereum’s new wallet creation has surged in December, suggesting strong network growth.
Despite this growth, ETH’s price has remained stagnant within a narrow range between $2,800 and $3,300 for almost six weeks.
Sentiment among long-term holders has improved, indicating potential for upward price movement.
The creation of wallets and rising sentiment could signal a future price surge for Ethereum.

Ethereum’s Network Growth Soars in December, Yet Price Remains Stagnant

Data from Santiment and TradingView suggests that Ethereum might be approaching a pivotal moment where its underlying network strength could eventually drive the price upward, despite ongoing caution from long-term holders.

Ethereum Network Growth Reaches Multi-Month Highs

Data from Santiment shows that Ethereum's daily network growth, tracked by the number of newly created wallets, has significantly increased throughout December.

Ethereum New Addresses

Source: X/Santiment

Two major surges stand out in the data. These are among the highest daily readings seen in recent months, surpassing the growth levels observed during Ethereum’s rally last summer. Typically, such rapid onboarding of new wallets could indicate impending price increases, especially if this trend continues over several weeks.

ETH Price Remains Stagnant Despite Strong Fundamentals

In stark contrast to the surge in network growth, the ETH price chart presents a different reality.

Ethereum 12-Hour Price Trend

Source: TradingView

For nearly six weeks, Ethereum has remained in a trading range between $2,800 and $3,300, struggling to either break through resistance or test lower lows. This condition of stability suggests indecision rather than weakness, particularly given the rising activity on the network.

Holder Sentiment Begins to Improve

The TradingView Holders Sentiment indicator offers additional insights into market conditions. After a period of negative sentiment in November where long-term holders adopted a cautious stance as ETH declined, mid-December saw a turnaround, with sentiment returning to neutral to positive territory. This change is significant as:

Improved sentiment, combined with a spike in wallet creation, often hints at the onset of renewed bullish momentum.

A Higher Low May Be Forming

Ethereum has successfully defended the $2,860 – $2,900 price zone multiple times. Coupled with the improving sentiment and a stable consolidation range, this pattern suggests that ETH may be establishing a "higher low," which is generally a precursor to a trend reversal. If the current rate of new wallet creation continues, demand may start to outstrip supply, creating the necessary conditions for ETH to break free from its multi-week price range.

Final Thoughts

In conclusion, while Ethereum's network growth showcases a healthy influx of new users, the disconnect between this growth and ETH's stagnant price raises questions about future market movements. As sentiment shifts and wallet creation accelerates, observers will watch closely to see if these factors coalesce into a price breakout.