Key Points
- Ethereum’s monthly on-chain volume reaches a 22-month high, totaling $130 billion in March.
- ETH’s futures market trading volume has seen a decline.
Ethereum’s monthly on-chain volume has peaked at its highest in 22 months, reaching $130 billion in March. This is a 14% increase from February’s $114 billion, and a 21% growth year-to-date.
Reasons for Ethereum’s Volume Surge
The increase in Ethereum’s transaction volume this month is largely due to a rise in demand for the Proof-of-Stake (PoS) network. A record-breaking daily count of new addresses created on the network, surpassing 116,000, has been reported.
This surge in network activity has led to a high ETH burn rate, reducing the coin’s circulating supply to a post-merge low. Data shows that 89,036 ETH coins, worth around $314 million at the current price, were removed from circulation in the last month. The circulating supply of ETH now stands at 120.07 million.
Effects of Ethereum’s Dencun Upgrade
Following the implementation of Ethereum’s Dencun Upgrade and a subsequent drop in transaction fees, there has been an increase in unique addresses transacting with the network’s native coin for the first time. The daily count of new Ethereum addresses, tracked using a 7-day moving average, reached an 18-month high of 123,000 on March 20th. Demand for the PoS network has grown by 16% on a month-to-date basis.
However, the recent market correction has led to a decrease in ETH’s futures market trading volume. This drop in futures trading volume, which is common during market pullbacks, suggests a change in sentiment among traders. It reflects market participants’ indecision and their desire to wait for clearer signals before re-entering the market.
This dip in trading volume has also resulted in a decline in open interest. At the time of writing, ETH’s futures open interest was $13.08 billion, a decrease of 8% over the past week.
