Ethereum (ETH) Fees Skyrocket: Here’s Key Reason Behind It

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As a seasoned crypto investor with a decade of experience under my belt, I find myself closely monitoring the recent surge in Ethereum transaction fees. Having weathered multiple market cycles and witnessing firsthand the ebb and flow of digital assets, I’ve learned to stay vigilant but not panic during such periods.

In simple terms, the cost for processing transactions on Ethereum, which is the second most valuable cryptocurrency in terms of market value, has significantly risen over the past week, climbing approximately 60%.

This week has seen a substantial rise in Ethereum’s activity level, as reported by IntoTheBlock. This boost is reflected in the almost 60% increase in total fees.

This week saw a substantial surge in activity on the Ethereum network, with total transaction fees rising approximately 60% due to the resumption of normal activities following holiday breaks.

— IntoTheBlock (@intotheblock) September 13, 2024

Upon resuming my daily activities post-summer break, I’ve observed a significant increase in the number of transactions on the Ethereum network. It appears that many users have also returned, resulting in heightened engagement with the Ethereum blockchain. This increased activity has led to a higher volume of transactions, which in turn has caused a spike in total fees.

2024 saw a decrease in mining wallets corresponding with the falling prices of Bitcoin and Ethereum, as indicated by independent on-chain data from Santiment.

According to a tweet from Santiment, an analytics firm specializing in blockchain data, Bitcoin and Ethereum mining wallets have been experiencing reduced holdings since the first half of 2024. Specifically, Ethereum mining wallets currently hold approximately 1.18 million ETH, which equates to about 4.5% of the total supply, following a peak on June 10, 2024.

Following the recent modest uptick in the cryptocurrency market, Santiment advises traders to keep an eye out for an increase in the total supply across different coins as a robust indicator that a new bull market could be on the horizon.

ETH price action

Currently, as I type this, Ethereum has risen by 0.19% over the past 24 hours to reach $2,348. However, Ethereum’s upward trend seems to be encountering resistance around the $2,400 mark, potentially leading to more selling.

As an analyst, I’d rephrase it like this: To regain momentum in the market, I believe it’s crucial for Ethereum buyers to maintain the price above $2,400. If they manage to do so, we could potentially witness Ethereum reaching $2,682, and possibly surpassing the significant resistance level at $2,850.

If ETH‘s value drops below $2,300, it might suggest that the bears are dominating the market. This could potentially drive the Ethereum price down to approximately $2,111. Attempts by buyers to curb this decline may occur around $2,111, but if this level is breached, Ethereum might approach the psychological support at $2,000.

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2024-09-13 18:18