Today, as geopolitical conflicts between Israel and Iran heightened and tensions rose, causing concern in financial markets, Bitcoin and the wider cryptocurrency sector experienced significant selling pressure. Yet, this downturn was met with robust buying activity from investors. The price of Ethereum dipped to $2,877 earlier today, but bulls have since rallied, pushing the price back up to $3,100.
Ethereum Gas Fee Drops to 3-Month Low
According to latest findings from Santiment, an analytics firm specializing in on-chain data, transaction fees on Ethereum have dropped dramatically. The current average fee for a transaction is now $2.07, which represents a substantial decrease compared to the $15.21 recorded during the peak demand period on March 4th.
According to Santiment’s analysts, Ethereum network fees can indicate the general mood of the cryptocurrency market. When investors are extremely optimistic and expect big price jumps (“To the Moon”), fees tend to spike. On the other hand, during periods of pessimism and belief in a downward trend for crypto markets (“Crypto is Dead”), fees usually decrease.
The relationship between transaction fees and market sentiment in cryptocurrencies, particularly Ethereum, highlights their cyclical trend. Fees tend to peak when prices do, while times of low fees correspond with price dips. In simpler terms, high fees occur during market upswings, whereas fee reductions are typical during market downturns.
Alternatively, while Ethereum’s Layer-1 rivals such as Solana have experienced a massive influx of DeFi activity and meme coin popularity, resulting in increased competition. This competition has also caused Ethereum’s network to become less congested, thereby keeping gas fees more affordable.
ETH Price Action Ahead
Ethereum tried to bounce back but hit a roadblock around $3,100, much like Bitcoin’s past experiences. At first, it managed to hold above $3,000, but a pessimistic mood took over, causing the price to drop below this threshold and touch $2,900 momentarily. The lowest point was recorded at $2,867 before a surge occurred.
At present, Ethereum is bouncing back from its setbacks, climbing above the 23.6% Fibonacci mark of its previous slide from $3,278 to $2,867. Nevertheless, it remains below $3,100 and the 100-hour Simple Moving Average (SMA).
Ethereum faces its next challenge close to the $3,020 price point. After that, there’s a strong resistance area around $3,070, which includes the 100-hour moving average and a bearish trend line on the hourly Ethereum-USD chart. Further hurdles are expected near $3,120, where the 50% Fibonacci retracement level lies. If Ethereum manages to surpass $3,120, it might lead to an upward trend towards $3,200.
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2024-04-19 10:59