Ethereum: The number of new smart contracts rose to the highest level in 2022, but…

Smart contract and dApp development on Ethereum has slowed in recent months. This is not surprising given the bearish market conditions that prevailed during the same period.

Here is the AMBCrypto price forecast for Ethereum (ETH)

Developers realize that their dApps are less likely to gain traction during a bear market. Given these observations, the recent surge in Ethereum smart contracts suggests that developers are becoming more optimistic.

To put that into perspective, the number of new smart contracts on Ethereum has soared to its highest levels in 2022 in the past three days.

Source: CryptoQuant

Ethereum developers have historically opted to roll out smart contracts during bullish times. This is because they are likely to get more benefits when there is a lot of activity in the market and this is often during an uptrend.

So it is not surprising that the most recent spike in the smart contract occurred during a bullish rally. The increase in smart contracts, along with the healthy use of said contracts, should lead to more transactions.

As expected, the number of Ethereum transactions has also increased since October 22.

Ethereum metrics

Source: CryptoQuant

Network fees have increased marginally and are not commensurate with the height of the smart contract. This may be because the use of the new smart contract is still low, and therefore they haven’t captured much value yet.

Current Ethereum Readiness Level

A possible reason for the low level of fees despite the bulls’ resurgence could be the relatively low value installed in DeFi. The bearish conditions of the past six months have seen a large number of network outflows as investors panicked. However, the total value confined to DeFi has risen slightly from its October low this week.

Ethereum metrics

Source: Glassnode

The rise of smart contracts on Ethereum is already a sign that developers are ready to cash in on the potential value during the bull run.

Other network participants are also present. For example, the number of active validators is currently at the highest level in six months. At the same time, the number of missed blocks increased earlier in the week.

We can conclude from the above information that Ethereum is well prepared to deal with the increased demand on the network. The bullish movement seen this week suggests that ETH may continue to experience renewed demand.

It managed to regain the $1500 price level and was trading at $1,547 at the time of writing. This was after a 22% rise over the past seven days.

Ethereum price action

Source: TradingView

However, ETH investors should note that demand has slowed over the past 24 hours. This is likely because ETH is overbought according to the RSI. It remains to be seen if the cryptocurrency will manage to break out of its lower band.

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