As an experienced analyst, I’ve seen how network activity and gas fees can impact the price of Ethereum (ETH). The recent decline in both gas fees and network activity could suggest decreased investor demand for ETH. However, this trend might be a temporary lull before the upcoming launch of the Ethereum spot ETF.
Based on recent on-chain analysis, Ethereum network gas fees have dropped to their cheapest point in almost two months. This decrease could potentially lead to increased transaction activity and buying pressure for Ether (ETH), as lower fees make it more economical for users to engage with the Ethereum blockchain. Consequently, there is a possibility that the price of ETH may experience an upward trend due to heightened network usage.
Ethereum Network Activity Wanes Ahead Of Spot ETF
As a researcher studying the cryptocurrency market, I’ve noticed an intriguing development in my latest analysis for Quicktake. An anonymous source, who goes by the pseudonym XYZ, has brought to light that the Ethereum network has seen a decrease in activity recently. Remarkably, gas fees have hit their lowest points in weeks during this period. This observation is particularly noteworthy given the upcoming approval and launch of the Ethereum spot ETF – an event that was widely expected to boost network activity.
Based on information from CryptoQuant, the cost for Ethereum network transactions, or gas fees, have reached their lowest point since May 2024. As depicted in the accompanying chart, the moving average of Ethereum’s gas prices over the past week has been decreasing steadily since early June.
Normally, the value of this indicator represents the degree of activity on a specific blockchain, such as Ethereum. When numerous users conduct transactions on the network, resulting in heavy traffic, gas fees often increase significantly.
In simpler terms, the fact that Ethereum’s average gas fees have reached their lowest point in the past two months indicates that there has been less activity on its network lately. This decrease in network activity suggests a waning investor interest in Ether, as many investors may currently be less eager to engage with the token.
The Quicktake analyst found it intriguing that surges in gas fees often correspond with price hikes for Ethereum. It seems reasonable to assume that heightened bullish market feelings lead to an influx of new network users, thereby explaining the observed connection between Ethereum price rises and increased network activity.
“Might we be on the verge of a quiet period before the Ethereum spot ETF’s approval, which could potentially trigger significant price movements in ETH?” the analyst suggested. This implies that the Ethereum ETF approval may lead to an increase in market activity and potential price fluctuations for Ether.
In the long run, this situation might lead to a noticeable increase in both the typical transaction fees for gas as well as the value of Ethereum (ETH).
ETH Price At A Glance
From my perspective as an analyst, at the moment, Ethereum’s price hovers around $3,139, representing a 1.8% increase within the past 24 hours based on data from CoinGecko. Over the last week, Ethereum has experienced a noteworthy surge of more than 4%.
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2024-07-13 12:11