• Decentralized finance (DeFi) growth has resulted in increased activity and the market cap of the network. 
  • The network’s hashrate has managed to keep pace with the difficulty.

The rise of DeFi creates opportunities and issues in the Ethereum network 

Ethereum sees a steady rise in activity and market capitalization, all thanks to the ongoing DeFi boom. Prices of Ether have also recovered from its 2020 lows. While this had positive effects on on-chain activity, it has also caused significant inflation in gas prices. It appears that DeFi is creating both opportunities and issues in the space. 

Ethereum gas fees have reached all-time highs due to the DeFi applications built on the network. Sophisticated investors are willing to pay high gas costs to ensure that their transactions are successful. As a result, ETH gas prices have surged more than 20x this year, as per a Forbes report. This has made it difficult for users who use the platform to take advantage of other DApps.

Non-DeFi businesses that rely on gas fees have been forced to shut down in recent times. For instance, UniLogin had to suspend operations because high gas fees meant that it had to pay $130 to onboard new users at one point. Many decentralized entities simply can’t survive if each transaction or action on the network costs a lot.

ETH/USD daily chart

ETHUSD daily chart

Ethereum bounced up from the $320 support line this Thursday and has gone up to $350 over three days. The price is currently negotiating with resistance at the downward trending line as it consolidates in the ascending triangle pattern. The MACD shows that market momentum is about to reverse from bullish to bearish,

ETH/USD hourly chart

ETHUSD hourly chart

The hourly chart has been moving up in a massive ascending parallel channel. The lower boundary has consistently held firm and ensured that the price kept trending upward. However, things may change soon. The MACD has reversed from bullish to bearish, which may push the price below the channel. 

Along with that, if the bulls do take control, two factors may prevent upward movement. Firstly, the SMA 200 is a significant barrier. Secondly, an upward trend will push the price into the overbought zone. This will inevitably lead to bearish price action.



IntoTheBlock’s “In/Out of the Money Around Price” (IOMAP) model reveals there is a moderate supply barrier at $345 that’s holding the price up. In this level, 306.82k addresses are holding 1.88M ETH. On the upside, there is a strong resistance wall at $358, where 323.9k addresses have previously bought a whopping 9.19M ETH. If the buyers somehow manage to gain enough momentum to break above this level, the upside potential is hugely significant with moderate and weak resistance levels.

ETH on-chain and network metrics

#1 Holder Distribution


Santiment’s holder distribution chart shows a rise in the number of addresses with 100,000 - 1 million ETH. Over the last five days, the number of holders in this category rose from 159 to 165. This shows that the heavy hitters are consolidating their positions.

#2 Hashrate and Difficulty

Another interesting thing to look into is the difficulty and hashrate of the network.


Ethereum difficulty has reached its highest levels since March 2019. Also, it looks like the hashrate has managed to keep up with the network difficulty.

This is a positive sign as it shows that the miners are motivated to work in the network's interest instead of packing things up and leaving the network. Hashrate is a critical metric that helps us gauge the health and well-being of the entire network. Higher the hashrate, the healthier the network.

#3 Miner balance


Santiment’s miner balance chart shows us that the amount of ETH balances belonging to miners has gone up from 1.08M on September 3rd to 1.12M on September 25. This is another positive sign as this tells us that the miners are not just selling off their block rewards. This reduces the token velocity and increases the overall perceived value of the Ethereum network.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Cardano price positioned for bullish reversal, with 100% gains in sight

Cardano price action has been some of the most dismal and disappointing out of all the major cryptocurrencies. But Cardano’s fortunes are about to change.

More Cardano News

Binance Smart Chain implements ongoing burn like Ethereum’s EIP-1559

Binance successfully concluded the Bruno upgrade v1.1.5 earlier today. A burn mechanism is now implemented to reduce the circulating supply of Binance Coin. 

More Binance Coin News

XRP nodes run by Ripple fell out of sync for over 5 hours, disrupted wallet services

Public XRP ledger nodes “s1” and “s2” run by Ripple fell out of sync with the XRP ledger for over 5 hours yesterday. Non-custodial XRP wallet Xumm was not functioning well, disrupting usage and accessibility. 

More Ripple News

Chainlink price ready to reverse, 30% upswing likely for LINK

Chainlink price seems ready for a reversal of its two-week downswing as it attempts to create a higher high. This outlook is also supported by on-chain metrics, which suggest the possibility of accumulation at the current levels for LINK.

More Chainlink News

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!