Ethereum Market Analysis: ETH/USD drops down, while researchers scratch their head over mysterious multi-million transaction fees

A few days back, multiple transactions on the Ethereum network were charged transaction fees up to $2.6 million. Vitalik Buterin, the co-founder of Ethereum, had suggested that the enormous fees “may actually be blackmail," but some experts have debunked this claim. 

The first suspicious transaction was carried out on June 10 when a user paid $2.6 million in fees to send just 0.55 ETH. Just a few hours after this, another transaction of 350 ETH was carried out from the same wallet and the user paid an additional $2.6 million in fees. The following day, a transfer of 3,221 ETH was charged a fee of $0.5 million. 

Following these incidents, a Chinese analysis firm, PeckShield, published an article saying that hackers paid the multimillion-dollar fees to ransom a crypto exchange after gaining limited access to the platform's operational functions. PeckShield added that the hackers are threatening to empty the exchange’s wallet if they are not paid a bribe. Vitalik Buterin, the co-founder of Ethereum, retweeted that article, further elaborating on the story. 

However, according to a Cointelegraph report, Alex Manuskin, a blockchain researcher at crypto wallet firm ZenGo, said the blackmail theory “takes some very peculiar circumstances” to be true. Manuskin highlighted that after the first incident, the supposedly hacked account did not change its behavior and continued to run normally. 

Transactions continued going in and out. If the hackers controlled the key, why did they [the hacked entity] continue operating the service as usual?

The blockchain researcher suggests that the address could belong to “some service in east Asia” that users access “from various exchanges including Bithumb, OKEx, Coinone and others.”

ETH/USD daily chart

ETH/USD dropped from $233.77 to $233.35 in the early hours of Thursday as the bears retained control for the second straight day. The price had earlier fallen after encountering resistance at the SMA 20. The 20-day Bollinger Band has narrowed, which shows decreasing price volatility. The William’s %R is trending along in the neutral zone, while the Elliott Oscillator has had eight consecutive red sessions.

Support and Resistance

ETH/USD faces strong resistance upfront at $237.50, SMA 20 and $248.30. On the downside, healthy support lies at $230.95, $221 and SMA 50.

Key levels