Growth in Active Addresses and New User Participation: How They Could Impact Ethereum (ETH) Price and Reach $5000

The Ethereum (ETH) network continues to demonstrate impressive mass adoption, and recent events over the past few weeks forewarn of the potential surge of this cryptocurrency to new all-time highs. On-chain metrics are becoming key indicators to trace Ethereum's path to $5000.

The most prominent signal is associated with the increase in the number of active addresses in the Ethereum network. Recently, the milestone of 100 million users was surpassed, signaling substantial interest in this cryptocurrency. This growth of addresses with positive balances became possible thanks to Ethereum's transition from an energy-intensive Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) algorithm. This transition led to a nearly 99.988% reduction in energy consumption in the network and a decrease in average transaction fees to a three-year low.

However, it's not just the growth in the number of addresses that makes Ethereum more attractive. Data shows that the percentage of addresses with non-zero balances significantly increased after the transition to PoS. This indicates that the reduction in transaction fees and optimization of energy consumption have made this cryptocurrency more accessible to new investors. Currently, 37% of all Ethereum addresses have active balances, signifying a substantial reduction in entry barriers. This factor may encourage more people to invest in Ethereum, potentially driving up its price.

In addition to the increase in the number of active addresses, the participation rate of new users in the Ethereum network has reached its maximum values. This means that new investors and users have played a significant role in Ethereum's economic activity. This metric demonstrates that transactions by newcomers have become a crucial factor in recent weeks. With their active participation, Ethereum is well-positioned to update its historical highs.