• Ethereum transaction fees have dropped to multi-month lows, indicating that the token could see a reversal in its price.
  • The figure represents a decline of over 75% of the average fee price since November 2021.
  • Ethereum could be preparing for a 25% climb if a key support level holds. 

While Ethereum price slid lower below $3,000, the network’s median fees have dropped below $3, suggesting that demand for ETH transactions have been low. Increased scalability and lower transaction costs could improve investors’ outlook on the asset, boosting the token’s price.

Ethereum fees drop to July 2021 lows 

Ethereum transaction fees have reached its lowest level since July 28, 2021, as ETH price dropped below $3,000. According to on-chain analytics platform Santiment, low fees usually correlate with a bounce in the asset’s price. 

The figure represents a decrease of over 75% of the average fee price since November 2021, when fees reached over $60 on average.

ETH fees

Ethereum median fees

Ethereum fees have been critical to the sustainability of the blockchain network, as users who create transactions must be involved in a bidding process to have their operations processed more quickly. The higher fees paid to miners, the faster the confirmation process is for the transaction.

To ease the burden of paying high transaction fees is the Ethereum Consensus Layer, formerly known as ETH 2.0, which aims to introduce proof-of-stake and scalability solutions such as sharding which could increase the transaction processing capacity to nearly 100,000 transactions per second.

Vitalik Buterin, co-founder of Ethereum recently introduced the concept of a “near-future hard fork” that would include “blob-carrying transactions” which could temporarily relieve scalability concerns before sharding begins. The proposed solution is expected to be adopted in the Shanghai hard fork.

Ethereum price gears up for 25% ascent

Ethereum price could be headed for a 25% rise to tag the upper boundary of the ascending parallel channel at $3,584 on the 12-hour chart

The first line of resistance will emerge at the 21 twelve-hour Simple Moving Average (SMA) at $3,039, coinciding with the 78.6% Fibonacci retracement level. ETH may also encounter a hurdle at the 100 twelve-hour SMA at $3,131, intersecting with the middle boundary of the governing technical pattern.

ETH

ETH/USDT 12-hour chart

In order for the bullish outlook to be validated, Ethereum price must sustain above the lower boundary of the prevailing chart pattern at $2,851 which acts as a reliable support. An increase in selling pressure may push ETH lower toward the 50 twelve-hour SMA at $2,761.

 

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 Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Why LUNA traders do not have to be in the market all the time

Why LUNA traders do not have to be in the market all the time

Terra (LUNA) price action has slipped below a critical level outlined a few days ago. As price action moves start to get smaller, a big move is set to happen, but it is very cloudy to see where that move will be going.

More Terra News

SEC vs. Ripple case, two key decisions awaited by XRP holders

SEC vs. Ripple case, two key decisions awaited by XRP holders

XRP holders are awaiting key decisions in the SEC vs. Ripple case. Experts believe judge Sarah Netburn could rule on the two key decisions in the lawsuit against payment giant Ripple. 

More Ripple News

MATIC price explodes as Polygon achieves Carbon neutrality

MATIC price explodes as Polygon achieves Carbon neutrality

MATIC’s purchase of carbon credits through KlimaDAO partnership represented 104,794 tonnes of greenhouse gasses, equivalent to the Ethereum scaling solution’s debt since 2019. Carbon neutrality has fueled a bullish sentiment among traders and 

More Polygon News

Things have suddenly changed for the Shiba Inu price, is the bottom in?

Things have suddenly changed for the Shiba Inu price, is the bottom in?

Shiba Inu price may have bottomed but this can only be confirmed if the current rally persists. Traders should be aware of several factors. Shiba Inu price has suddenly changed as the bulls have printed a significantly large bullish engulfing candle on the daily chart. 

More Shiba Inu news

Bitcoin: Everything you need to know about BTC 200-week MA

Bitcoin: Everything you need to know about BTC 200-week MA

Bitcoin price has gone through turbulent times over the last few months. From reaching a new all-time high to hitting yearly lows and revisiting levels since 2020, the crypto markets have been extremely volatile.

Read full analysis

BTC

ETH

XRP