- Ethereum network activity has seen a significant rise, leading to a sharp increase in ETH gas fees.
- This surge in gas fees has been attributed to various factors, including increased DEX volumes and a rise in USDC deposit rates on the Aave platform.
- The increased onchain activity has also caused a substantial rise in total Ether fees burned daily.
Discover the nuances behind the recent surge in Ethereum network activity and its impact on ETH gas fees, providing a detailed analysis for informed financial decisions.
Ethereum Network Sees Surge in Activity and Gas Fees
The Ethereum network has experienced a notable uptick in activity over the last two weeks, which has been accompanied by a significant increase in gas fees. According to a report by Coinbase, the average Ethereum gas fees between September 16 and September 26 increased by 498% compared to the monthly average. This rise in transaction costs reflects a broader surge in onchain activity.
Factors Contributing to Increased Activity
Coinbase analysts David Duong and David Han noted that there isn’t a single driver behind this increased activity. Instead, it results from several interrelated factors. For instance, the volume of trades on Ethereum decentralized exchanges (DEXs) has seen a modest increase of 9% week-on-week. Furthermore, USDC deposit rates on the lending platform Aave have risen from 3.5% to 4.5%, suggesting a modest uptick in leverage within the market.
Ethereum Transaction Fees and Volume
Increased onchain activity has led to Ethereum transaction fees spiking, with gas fees ranging between 30-40 gwei multiple times within the last week. According to Gashawk, a blockchain efficiency firm, these fluctuations in gas fees correspond with increased transaction volumes, which have risen 17% week-on-week. This surge in transaction fees has also led to a dramatic increase in total Ether fees burned daily, rising over 900% to 2,097 ETH between September 14 and September 24, according to data from CryptoQuant.
Technical Analysis: Ether’s Possible Bullish Shift
From a technical analysis perspective, Ether (ETH) is showing signs of potential bullish momentum. The cryptocurrency has broken above its relative strength index (RSI) downtrend line, which commenced following March’s multi-year high of $4,093. However, Ether still remains beneath its 100-day and 200-day exponential moving averages (EMAs), currently sitting at $2,770 and $2,864, respectively. For a sustainable recovery to be confirmed, bulls will need to turn these EMAs into support levels.
Ethereum Investment Products Gain Momentum
Investment products related to Ethereum have also seen a resurgence in interest. After a five-week streak of negative outflows, Ethereum investment products posted $87 million in inflows, the first significant inflows since early August. Notably, spot Ethereum ETFs recorded $58.7 million in inflows on September 27, driven by positive sentiment in the market. BlackRock’s ETHA product continues to see strong interest, with inflows of $11.5 million on the same day, bringing its net inflows to surpass $1 billion.
Conclusion
In summary, the increased activity on the Ethereum network has led to a significant surge in gas fees, corresponding with higher transaction volumes and increased leverage. While technical indicators suggest a possible bullish shift for Ether, significant resistance levels remain. Additionally, Ethereum investment products are seeing renewed interest, with substantial inflows recorded recently. As always, investors should conduct thorough research before making any investment decisions.
