In the past few months, smart contracts and dApp development rates on Ethereum have declined. This is not surprising, because there is a widespread bearish market situation during the same period.
developers realize that their dApps are unlikely to gain traction during bear markets. Given these observations, the latest surge in Ethereum smart contracts suggests developers are becoming more optimistic.
In the long run, the number of new smart contracts on Ethereum has soared to its highest level in 2022 over the past three days.
Ethereum developers have traditionally chosen to launch smart contracts during bullish times. This is because when there is a lot of activity in the market, they may gain more utility, which is usually during bull markets.
Therefore, it is no surprise that the latest smart contract soar occurred during a bullish rebound. The increase in smart contracts, coupled with the healthy use of the contract, should lead to more transactions.
As expected, the number of transactions on Ethereum has also seen an increase since October 22.
Network fees rose slightly, disproportionately to the surge in smart contracts. This is probably because new smart contract usage is still low, so they haven't gained much value so far.
Current Readiness of Ethereum
Despite the long regression, one potential reason for the lower fee level may be the relatively low value of DeFi locks. The bearish situation in the past six months has caused a large amount of money outflows on the Internet due to investor panic. However, the total value locked in DeFi this week increased slightly from the October lows.
The surge in Ethereum smart contracts has shown that developers are ready to capitalize on potential value during a bull market.
Other network participants are also in the market. For example, the number of active validators is currently at its highest level in 6 months. Meanwhile, the number of missed blocks did soar earlier this week.
We can conclude from the above information that Ethereum is ready to deal with the surge in network demand. The bullish action we've seen this week suggests that ETH may continue to experience recovery demand.
It managed to recoup the $1,500 price level, trading at $1,547 at the time of writing. This is after a 22% increase in the past 7 days.
However, ETH investors should note that demand has slowed down in the past 24 hours. This may be due to the fact that the RSI ETH is now overbought. Whether cryptocurrencies will manage to exit their lower range remains to be seen.
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