Layer 2 solutions help reduce Ethereum transaction fees and improve scalability. However, challenges like fragmented liquidity and bridging risks remain barriers to full adoption.
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On-chain data—like wallet activity, exchange inflows/outflows, and whale movements—reveals investor behavior. Spikes in exchange deposits may signal selling, while accumulation hints at bullish sentiment. It’s a powerful early indicator.
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To assess a project's health using on-chain data, look at metrics like transaction volume, active wallet addresses, and liquidity. If a project shows consistent growth in transaction volume and active users, it's a positive indicator of adoption and user trust. Also, track token liquidity—low liquidity can signal financial troubles. Lastly, monitoring the distribution of tokens among whales is important; if too many tokens are concentrated in a few hands, it could point to potential manipulation risks.
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