Ethereum’s demand soars to 13-month high: Is this why?

• The daily count of new addresses trading ETH has risen to its highest since November 2022.
• Although the coin’s price moved sideways, investors continued to buy.

Ethereum [ETH] has witnessed a surge in network activity over the past three weeks, with demand for altcoin climbing to a 13-month high on the 11th of January, data from Santiment showed. 

📊 #Altcoins are creating separation from one another as market polarity continues after last week’s big news:

Net. Growth Risers (3 weeks):
📈 $ETH +6%
📈 $ENS +124%
📈 $T +195%

Net. Growth Fallers (3 weeks):
📉 $ENJ -32%
📉 $BAT -42%
📉 $APE -23%https://t.co/g66cGSuBG8 pic.twitter.com/VXVWssRR48

— Santiment (@santimentfeed) January 18, 2024

According to the data provider, 636,480 new addresses were created on that day on the network to trade the leading altcoin. The last time the number of new ETH wallet addresses created in a single day reached such a high was in November 2022. 

The surge in demand for the coin on the 12th of January coincided with the approval of the first-ever Bitcoin Spot ETF, which was granted by the U.S. Securities and Exchange Commission on the 10th of January.

According to data from CoinMarketCap, on the 12th of January, the surge in demand caused ETH’s price to rally above $2700 to exchange hands at a high last observed in April 2022. 

Bullish sentiment lingers despite…

A look at ETH’s price movements on a seven-day chart revealed that after clinching this price high, the coin’s price has since trended in a narrow price range. This is attributed to the significant volatility accompanying the price uptick recorded.

At press time, the gap between the upper and lower bands widened, confirming that the coin remained susceptible to price swings. Its Bollinger Bandwidth also trended upward, showing that volatility remained high in the ETH market.

However, despite the narrow price movements and high market volatility, accumulation continued to outpace coin sell-offs. At press time, ETH’s key momentum indicators rested at overbought highs.

For example, its Relative Strength Index (RSI) was 70.68, while its Money Flow Index (MFI) was 87.41.

Likewise, ETH’s Chaikin Money Flow (CMF) returned a value above zero at 0.15. When an asset’s CMF is above zero, it suggests that there is more buying pressure.

At 0.15, ETH’s CMF showed that accumulation persisted despite the coin’s sideways movements.

Source: TradingView

Read Ethereum’s [ETH] Price Prediction 2024-25

In the coin’s derivatives market, the current bullish sentiment presented itself as rising futures Open Interest. Since the ETF approval, ETH’s Open Interest has grown by 17%, according to data from Coinglass. 

As of this writing, the alt’s open interest stood at  $8.81 billion, its highest since October 2022.