Fidelity Digital Assets released a \u201cQ2 2023 Signals Report\u201d on July 18, which claimed that Ether\u2019s\u00a0outlook for the next 12 months and the long term is positive. Year-to-date, Ether (ETH<\/a>)\u00a0has gained 62%, but while the investment firm might be short-term bullish on Ether, that does not mean it believes that the month-long bullish channel will be sustained.<\/p>\n While institutional investors like Fidelity Digital Assets may have a bullish longer-term vision for ETH’s price, let\u2019s compare their analysis against network and market data to see if they\u2019re on the money.<\/p>\n Beyond the technical indicators, the rationale behind Fidelity\u2019s bullish<\/a> outlook for Ether is the network\u2019s higher burn rate versus coin issuance, the \u201cnew address momentum\u201d and a growth in the number of network validators. <\/p>\n According to the Fidelity report, the net issuance since the Merge in September 2022 resulted in a net supply decrease of more than 700,000 Ether. Additionally, the analysts claim that Glassnode data showing an increasing number of Ethereum addresses that transacted for the first time ever proves healthy network adoption.<\/p>\n The report also points to a 15% increase in the number of active Ethereum validators in the second quarter.<\/p>\n The expectation around EIP-1153 is also building momentum for the Ethereum network, as the \u201ctransient storage opcode\u201d improves smart contract efficiency, reduces costs and amplifies the Ethereum Virtual Machine design. The change is especially meaningful for decentralized exchanges (DEXs), where Ethereum\u2019s dominance declined to 46% from 60% six months prior, according to DefiLlama data.<\/p>\n Another potentially bullish factor for the Ethereum network is the anticipated upgrade on the leading DEX, Uniswap. According to a July 17 presentation at the Ethereum Community Conference, the upcoming Uniswap v4 will allow users to build unlimited types of pools using programmable buttons (hooks), native ETH support and a singleton contract that performs internal transactions before settling final balances. <\/p>\n The announcement fueled the likelihood that EIP-1153 will be included in the next \u201cDencun\u201d upgrade, which triggered Slingshot and DeFi Pulse co-founder Scott Lewis.<\/p>\n i had missed the news that uniswap labs got eip1153 into cancun.<\/p>\n they kept the details for wanting eip1153 secret from the community, only publishing v4 only after inclusion was finalized.<\/p>\n informal governance captured by an insider-aligned, for-profit monopoly. sad day.<\/p>\n \u2014 scottlewis.canto➕ (@scott_lew_is) June 13, 2023<\/a><\/p><\/blockquote>\n If approved, the implementation will be vital for the Ethereum network to recoup the market share lost due to high gas fees, as the seven-day average transaction cost has been above $4 since February. Consequently, Ethereum\u2019s total value locked has dropped to its lowest level since April 2020, at 13.55 million ETH, according to DefiLlama.<\/p>\n Moreover, decentralized application activity has dwindled, as shown by DappRadar\u2019s unique active wallets\u2019 30-day data: Uniswap, minus 28%; 1inch Network, minus 14%; MetaMask Swap, minus 8%; and OpenSea, minus 5%. As a comparison, in the same period, BNB Smart Chain\u2019s PancakeSwap gained 10%, and Polygon\u2019s Uniswap users increased 8%.<\/p>\n Ether quarterly futures have been signaling unease among professional traders. Those fixed-month contracts typically trade at a 5% to 10% premium compared to spot markets to compensate for the delayed settlement, a situation known as contango.<\/p>\n According to data from Laevitas, the Ether three-month futures premium currently stands at 4%, which is below the neutral threshold and lower than the 5.5% level seen on July 14. This indicator is clear evidence that traders are less inclined to use leverage for bullish ETH positions.<\/p>\n More concerningly, Ether\u2019s 59% gains year-to-date might have caused investors to become overly optimistic. A recent survey from CryptoVantage of 1,000 North Americans that invested in cryptocurrencies over the past five years found that 46% named Ether as the top contender to surpass Bitcoin (BTC<\/a>). <\/p>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-07\/b38f619d-4602-4b2f-8fd5-35c8432c8a73.png\")
![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-07\/ba601833-eb7d-402f-bfbb-1235aebd1b6f.png\" "\\"\\"")
Dencun upgrade expected to reduce transaction costs<\/h2>\n
\n
Derivatives metrics\u00a0remain flat<\/h2>\n
![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-07\/0a325960-b51c-4314-8582-7d29d7330e69.png\" "\\"\\"")
![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2023-07\/5e78f018-10ab-4ca6-95c5-123c11409154.png\" "\\"\\"")