The rising network growth of these Ethereum ERC-20 tokens suggests a bullish outlook 🚨 This article is 5 years old...
The rising network growth of these Ethereum ERC-20 tokens suggests a bullish outlook
3 min read
Updated: Apr. 10, 2020 at 11:59 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Many cryptocurrency projects within the industry are still suffering from the significant downturn the market suffered during Black Thursday. Despite the state of commotion in the crypto sphere, on-chain metrics reveal that some of the top ERC-20 tokens are still growing.
Network growth as a price indicator
In a recent report, Santiment affirmed that network growth represents one of the most important gauges to understand the health and well being of a given crypto project. The behavior analytics firm maintains that this metric can show the number of new addresses being created on a daily basis. This data can then be used to analyze the growth or decline of user adoption over time.
Brian Quinlivan, Market and Social Media Director at Santiment, said:
“Generally, [we can] see that a rising network growth leads to a rising price of any project over time, in most cases. On the flip side, declining network growth for a long enough stretch can usually indicate a future slumping price with the lack of newly created addresses constantly in-flowing the coin or token.”
Under this premise, Quinlivan believes that looking at the amount of network growth that different ERC-20 tokens have experienced after the mid-March crash can help determine the likelihood of their prices continuing to recover.
Ethereum
The smart contracts giant, for instance, has gone through a steady increase in the number of new addresses being created on its network each day. In fact, over the past three months the network growth of Ethereum continues reaching higher highs.
This uptrend is definitely encouraging as it indicates that Ether’s price could advance further up, according to Quinlivan.
Chainlink
Moreover, the decentralized oracle network saw a significant spike in network growth as the market was crashing on Mar. 12. Nearly 2,500 new Chainlink addresses were created that day alone followed by a few other spikes later on. This is a clear sign that LINK has the potential to fully recover from the recent downturn.
Quinlivan explained:
“[Chainlink’s] daily network growth is still occurring at a higher rate than it was when its price first started to surge in January. And, it is actually still below those January prices when network growth was lower. So from a divergence standpoint, it’s clear that there is some room to make up for on the upside for this increasingly popular asset.”
Basic Attention Token
Finally, Basic Attention Token has one of the most promising network growth patterns amongst the altcoins previously analyzed. Indeed, this cryptocurrency saw more than 2,600 addresses created yesterday after Gemini announced that it will be listing it to its retail platform.
Even though data from IntoTheBlock reveals that approximately 89 percent of all the addresses holding BAT are losing money, the massive amount of addresses being created on its network suggests that a big number of holders will soon be in the green.
Quinlivan affirms that an increase in the number of addresses being created is “one of the most accurate foreshadowers.” But, only time will tell whether or not the price of these ERC-20 tokens will follow the path that their network growth has seen since the market meltdown.
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Imported coin data for: Santiment Network Token.
Ethereum
$3,329.50
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Chainlink
$22.6049
Chainlink is a decentralized oracle network that connects smart contracts on the blockchain to real-world data.
Basic Attention Token
$0.22206
Basic Attention Token (BAT) is an Ethereum-based token that improves the efficiency of digital advertising by creating a new unit of exchange between publishers, advertisers and users.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
IntoTheBlock
IntoTheBlock is a data science company applying cutting-edge research in AI to deliver actionable intelligence for the crypto market.
