Ethereum aims to reclaim $2,817 amid 498% rise in transaction fees
- Ethereum transaction fees spiked 498% in the past ten days amid rising on-chain activity.
- Ethereum ETFs recorded $0.1 million in outflows, their lowest day of negative flows since launch.
- Ethereum aims for $2,817 and could post heavy gains if it maintains move above key trendline.
Ethereum (ETH) trades around $2,690 on Friday, up over 2% following a 498% surge in transaction fees in the past ten days. Meanwhile, ETH is attempting to reclaim a key support level around $2,817.
Daily digest market movers: Ethereum transaction fees and burnt ETH sees spike
Ethereum transaction fees surged to a seven-week high in the past few days following rising on-chain activity in its blockchain, noted Coinbase.
According to analysts David Duong and David Han, decentralized exchange (DEX) and ETH transfer volumes increased 7% and 19% in the past week. The increased activity has resulted in a subsequent rise in transaction fees.
ETH Median Gas Fees and Transfer Volume
"The average gas price in the past 10 days, September 16 - 26, has risen 498% above the preceding 30-day average, and the median transaction on Ethereum now costs $1.69 compared to $0.09 at the start of the month," said the analysts.
The increased transaction fees also caused a surge in total ETH fees burnt daily, rising over 900% to 2,097 ETH on Thursday, per CryptoQuant's data.
The rising gas fees and burnt ETH could lead to deflationary pressure and signal potential growing bullish momentum among Ethereum investors.
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ETH Total Fees Burnt
Meanwhile, Ethereum ETFs posted $0.1 million in net outflows on Thursday, its lowest recorded day of outflow since launch. BlackRock's ETHA and Fidelity's FETH continue to see positive flows with inflows of $15.3 million and $15.9 million, respectively. On the other hand, Grayscale's ETHE resumed its negative flows after two days of zero flows, posting outflows of $36 million.
Ethereum could be set for massive rally in coming months
Ethereum is trading around $2,690 on Friday, up 2.2% on the day. According to Coinglass data, ETH has recorded liquidations worth $18.85 million in the past 24 hours, with long and short liquidations accounting for $6.66 million and $12.19 million, respectively.
In the past week, Ethereum has been trading above a key descending trendline that had kept prices at bay since June. If ETH continues trading above the trendline, it could see a massive rally in the coming months.
ETH/USDT daily chart
ETH posted similar moves from August to November 2022 and July to October 2023, trading below a similar trendline before breaking out and rallying over 94% and 164% in subsequent months, respectively.
In the short term, ETH is attempting to sustain a move above a resistance around $2,707. ETH could reclaim the $2,817 key level if it fails to see a rejection around this resistance.
The Relative Strength Index (RSI) and Awesome Oscillator (AO) momentum indicator are above their neutral levels, with the AO posting consecutive green bars. This indicates prevalent bullish momentum among investors.
A daily candlestick close below the $2,207 support level will invalidate the bullish thesis.
Ethereum FAQs
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
