Ethereum ended 2019 down marginally, with the crypto severely underperforming Bitcoin, which posted a nearly 100% climb throughout the past year. This lackluster performance came about in spite of strong fundamentals that were bolstered by a significant amount of ETH being locked up in DeFi initiatives.
There are some other factors and key data points that could signal that 2020 will be another great year for Ethereum from a fundamental perspective, but will these factors help bolster ETH’s price action in the year ahead?
Ethereum’s Fundamentals Keep Growing, But Price Remains Stagnate
Throughout 2019, Ethereum posted a slight decline against its USD trading pair, while woefully underperforming Bitcoin, which surged a stunning 95% throughout the year.
Over a short-term period, ETH has been incurring some slight upwards momentum, which has allowed it to claim a firm position within the lower-$130 region. Its short-term uptrend has come about after bulls ardently defended it from dropping below the $120 region.
One factor that surprisingly did not have a big impact on the cryptocurrency’s price action was the booming DeFi trend, which requires that users lock their ETH holdings on lending platforms in return for attractive interest payouts.
Nicholas Merten, a popular cryptocurrency YouTuber known as DataDash, spoke about this in a recent tweet, explaining that he believes ETH’s strong fundamentals coupled with its low price makes now a great buying opportunity.
“Seeing ETH at $130 almost makes my heart race a bit. It shows me unaware the general market is around DeFi. High-interest lending pools, functioning decentralized exchanges, functioning smart contracts + oracles… Fundamentals improving + cheaper price = opportunity!” He explained.
Seeing ETH at $130 almost makes my heart race a bit. It shows me unaware the general market is around DeFi.
High-interest lending pools, functioning decentralized exchanges, functioning smart contracts + oracles…
Fundamentals improving + cheaper price = opportunity!
— Nicholas Merten (@Nicholas_Merten) December 30, 2019
Further adding to this sentiment is the fact that a key data points are signaling that cryptocurrency is currently undergoing significant growth from a fundamental perspective.
Maksim Balashevich, founder of Santiment, spoke about this in a recent post on “Our Network,” explaining that the crypto has been seeing a steep growth in network activity and new addresses over the past several weeks.
“As of mid-December, we have seen a steep rise in Ethereum network growth, with the highest frequency of new addresses added to the network since June 2019.”
He further goes on to explain that retail buyers have been aggressively increasing their ETH holdings over the past year, which is an overwhelmingly bullish sign.
“In 2019, retail holders (addresses with 0.001 – 10 ETH) have increased their cumulative balance by 195k ETH, a 6.63% increase since January 1st,” he noted.
It has been said that in a healthy market price follows fundamentals, and if this proves to be true with Ethereum, the cryptocurrency could be in for an incredibly bullish 2020.