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Ethereum’s Hash Rate Sets Record Despite ETH Trading 75% Below All-Time High

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  • Ethereum’s price has stagnated over recent weeks.
  • After peaking at $490 last month, the coin has dropped around 30% to $340 as of this article’s writing.
  • At the recent lows, ETH was trading as low as $310.
  • Ethereum’s hash rate has continued to march higher despite the price of ETH falling.
  • This may be related to the extremely high transaction fees collected by miners over recent weeks and months.
  • The spike in transaction fees is related to a result of a growth in the decentralized finance space.
  • Certain Defi activities have spurred a strong uptick in transactions, driving the growth of collected fees.

Ethereum Hash Rate Hits Fresh All-Time High

Ethereum’s hash rate just hit a new all-time high despite ETH trading 75% below its all-time high price above $1,400. This metric continues to move higher in the face of a strong drop in the price of ETH since the summer highs of $490; the coin now trades at $340, far below those highs.

CoinMetrics data shows that the ETH hash rate has passed above 250 terrahashes per second, slightly above the highs seen in the middle of 2018. There seems to be somewhat of a lag between price action of Ethereum and the trajectory of the hash rate.

This surge in this leading on-chain metric is likely related to a spike in transaction fees collected by Ethereum miners. This spike in transaction fees is a likely result of an uptick in the demand for transactions spurred by a trend in decentralized finance.

Chart of ETH's hash rate since the start of Janaury 2017 from CoinMetrics, shared by CoinMetrics. Unit on the left is terrahashes per second.

As reported by Bitcoinist previously, data from Glassnode indicates that Ethereum miners collected $166 million in transaction fees in September alone. To put this metric into context, Bitcoin miners collected a relatively measly $26 million in transaction fees.

This means that over the course of last month, ETH miners collected eight times more in transaction fees that its primary competitor.

Alternatives Needed

Ethereum’s extremely high transaction fees may show the need for alternatives. Some commentators have said that the transaction fees that users were paying last month, when it cost dozens of dollars to send one transaction, may limit the upside for ETH.

Alternatives that help to reduce transaction fees for users and increasing the overall user experience may gain traction if Ethereum transaction fees remain high.

Photo by Pietro Jeng on Unsplash
Price tags: ethusd, ethbtc
Charts from TradingView.com
Ethereum's Hash Rate Sets Record Despite ETH Trading 75% Below All-Time High



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Ethereum’s Ongoing Breakout Suggests a Move to $500 Is Possible

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  • The price of Ethereum currently trades for $420.
  • This price is $100 higher than the September lows and around 15% higher than the coin was trading last week.
  • ETH is expected to push higher in the weeks ahead as it surmounts pivotal technical levels on a short-term basis.
  • Analysts are eyeing a move to $500 as $420 holds as support.

Ethereum Expected to Move Towards $500 as Key Levels Are Passed

Ethereum has undergone a strong rally over the past few days as Bitcoin has gained steam. The price of ETH currently trades for $420, $100 higher than the September lows and around 15% higher than the coin was trading at last week.

ETH is expected to push higher in the weeks ahead as it surmounts pivotal technical levels on a short-term basis.

One crypto-asset trader shared the chart below on October 22nd. It shows that because ETH is moving past the “major resistance” of $420, it could be cleared for a move to $500.

Chart of ETH's price action since the start of July with analysis by crypto trader Cactus (@TheCryptoCactus on Twitter).
Source: ETHUSD from TradingView.com

The expectations of a move to retest the year-to-date highs near $490 have been echoed by other market participants.

Jonny Moe, a crypto swing trader, shared the chart below after the move higher. Like the aforementioned chart, it shows that ETH’s recent move to the upside is technically important due to the resistance levels the coin is crossing

“Nice break above the $395 flat top on $ETH. ETH doesn’t always give throwbacks, so a $395 throwback is certainly possible before higher, but I wouldn’t be on it. Otherwise, this looks good for a run back near the $490 highs.”

ETH2 Around the Corner

Ethereum’s strong price performance comes as the ETH2 upgrade, also known as Serenity, has drawn closer.

In a blog post, ConsenSys developer Ben Edgington said that the ETH2 Deposit Contract is expected to be published this week. The publishing of this contract will confirm that the Beacon Chain Genesis, which will launch ETH2 officially, will launch in the next few days.

“Basically, as I understand it, we are good to go: deposit contract in the next few days; beacon chain genesis 6-8 weeks later. (This is not an official statement!). Meanwhile, be careful out there. Many fake deposit contracts and Launchpad front-ends will erupt in the coming days. Look out for the official anouncements: do not send Eth to random contracts; this is not DeFi.”

This upgrade is expected to boost Ethereum’s value proposition as it will give the coin the ability to be staked, restricting supply. On a long-term basis, ETH2 is expected to result in long-term bull trend as the upgrade increases the network’s usability.

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Price tags: ethusd, ethbtc, ethusdt
Charts from TradingView.com
Ethereum's Ongoing Breakout Suggests a Move to $500 Is Possible





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Chainlink brings Verifiable Randomness to Ethereum mainnet, keeps other chains in sight

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Chainlink’s verifiable randomness function, or VRF, has made its way to the Ethereum (ETH) main net. VRF will provide a decentralized source of randomness for the project’s decentralized ecosystem. 

A trusted source of randomness is essential for many applications, such as those in the gambling and gaming industries. Chainlink’s co-founder Sergey Nazarov told Cointelegraph that many blockchains  beyond Ethereum, such as the gaming-focused Matic Network, are interested in deploying the project’s VRF:

“I know that we have anywhere between 10 and 20 users announced as already using it from the time it was in testnet only. And I know a number of people have already used it for one or two things on mainnet. And I also know that a number of the chains that we’re integrating into, interestingly enough, whether they’re gaming-focused or not, already have people lined up to use it when we’ve finalized our integration to that chain.”

Sample use of Chainlink VRF. Source: Chainlink.

As with the function’s testnet deployment, the first use-case of VRF on the Ethereum mainnet is a gamified application that incentivizes users to save money called PoolTogether. Its co-founder, Leighton Cusack, shared his thoughts on the importance of having a trusted source of randomness:

“The V3 PoolTogether Protocol creates a true “money lego” for no loss prize games. An essential component of this is generating randomness. Using Chainlink VRF lets us move away from a less secure and centralized system to a decentralized one.”

VRF is a computationally intensive application which is more costly in terms of Ethereum fees than regular Chainlink oracles. According to Nazarov, the team has been working on VRF for a couple of years. He noted that a lot has changed in the Ethereum landscape during that interim:

“But then the gas price dynamics were very different and there were a lot more games on Ethereum. So interestingly enough, I think what’s going to happen with Chainlink VRF, it’s now going to successfully launch with a number of users on Ethereum mainnet. But those are the users that are still on Ethereum for gaming. And many users for gaming have now started to move to other more gaming-specific, which is then also where we’ll have Chainlink VRF soon as well.”

Integration with other EVM-compatible blockchains is relatively straightforward for Chainlink’s VRF, said Nazarov. He believes that, though the initial adoption of this technology will come from the blockchain space, sooner or later it will bridge into other industries. At the moment, many of these already employ their own reliable methods of generating randomness, and are not especially eager to go through the hurdles of adopting a decentralized alternative. Nazarov supposed that a major scandal could change all of this:

“Once in a while in the gaming industry, you see these kind of flashes of concern from users, you see some gaming sites somewhere frontrunning users from inside the gaming site, or you see a scandal with some gambling thing that’s regulated but some employee still was playing the game and they still were able to win against other players. And I think whenever those happen, those bigger firms do start to seek additional solutions.”



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On-Chain Ethereum Trends Favor Bulls Despite 5% Drop From Local Highs

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  • Santiment, a blockchain analytics firm, recently shared that Ethereum’s NVT is still “bullish”
  • The NVT is the network value to transaction ratio, which is seen as a price-to-earnings ratio for blockchain networks.
  • Data also shows that investors are accumulating ETH en-masse, with coins leaving exchanges at a rapid clip.

Ethereum On-Chain Trends Still Favoring Bulls

Ethereum has undergone a strong drop from its weekly highs around $385. The coin fell under $370 on Tuesday morning as capital flooded from the altcoin market back towards Bitcoin, which has underperformed altcoins over the past six months.

Despite the local, short-term drop, analysts remain bullish on ETH.

One key reason why this is the case is that Ethereum’s on-chain trends are still bullish.

Santiment, a blockchain analytics firm, recently shared the chart seen below. it shows ETH’s price action relative to the network value to transactions metric, which is seen as a price-to-earnings ratio for blockchain networks.

On the current state of the ratio, Santiment wrote that Ethereum is still “bullish” but the trend is moving into “neutral territory.”

Chart of ETH's price action over the past few years with an overlay of the NVT model.
Chart from Santiment, a blockchain analytics firm.

This post comes shortly after the firm noted that a spirit of accumulation has appeared amongst Ethereum holders and investors. Santiment recently reported that the number of ETH held on exchanges has dropped rather dramatically in the past two months, suggesting accumulation:

“$ETH’s top 10 whale exchange addresses have continued swapping their funds to non-exchange wallets, & moving holdings at an impressive rate. The 20.5% decrease in tokens on exchanges the past 2 months indicates price confidence by top #Ethereum holders.”

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Chart of ETH's price action over the past few months with an overlay of the number of top 10 exchange holdings vs. non-exchange holdings.
Chart from Santiment, a blockchain analytics firm.

Not Everyone Is Convinced of Altcoins

Not all investors and analysts in the space are convinced of altcoins such as Ethereum in the current phase of the Bitcoin market cycle, though.

Kyle Davies, a co-founder of crypto fund Three Arrows Capital, recently suggested that Bitcoin is likely to dramatically outpace altcoins. This came shortly after his business partner Su Zhu made a similar comment, suggesting that this is a time for BTC to rally while altcoins sink.

“You’re about to find out why all of the rich OG’s hold mostly $BTC.”

Just today, BTC rallied 2% as Ethereum sunk 2%.

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Price tags: ethusd, ethbtc
Charts from TradingView.com
On-Chain Ethereum Trends Favor Bulls Despite 5% Drop From Local Highs





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