Ethereum gas fees have experienced a dramatic increase over the past two weeks due to a surge in network activity, as highlighted in a recent TradingView report. This sharp rise in Ethereum gas fees is a significant development for those involved in cryptocurrency transactions.
According to data from Coinbase’s weekly report, published on Sept. 27, the average Ethereum gas fees between Sept. 16 and Sept. 26 have skyrocketed by 498% compared to the monthly average. The median transaction cost jumped from $0.09 to $1.69 during this period. This is indicative of the intense onchain activity driving up costs for Ethereum transactions.
Factors Contributing to the Surge
Analysis by Coinbase’s David Duong and David Han reveals numerous factors behind the recent spike in Ethereum gas fees. A notable increase in decentralized exchange (DEX) volumes, which are up by 9% week-on-week, is a key contributor. Additionally, USDC deposit rates on lending platform Aave have increased from 3.5% to 4.5%, suggesting a rise in leverage being taken by users.
Another significant factor is the 17% increase in total Ether transfer volumes, correspondingly driving up the transaction costs. Rising onchain activities are well-reflected in the gas fees, reaching peaks of 40 gwei multiple times throughout the last week.
Broader Implications of Rising Gas Fees
As Ethereum gas fees rise, the daily burned ETH has also seen a vast increase. Data from CryptoQuant shows a 900% increase in total Ether burned from Sept. 14 to Sept. 24, underscoring the broader impact of heightened activity levels.
Simultaneously, DApp volumes have significantly increased, reaching $3.6 billion, while NFT volumes rose by 17%, showcasing the extensive utilization of the Ethereum network.
Ethereum’s Market Dynamics
Ether Price Breaks Key Indicator
Technically, Ether’s price has surged above its Relative Strength Index (RSI) downtrend line, initiated in March when ETH reached a multi-year high of $4,093. This indicates potential bullish momentum for Ethereum in the short term.
However, Ether remains below its 100-day and 200-day exponential moving averages (EMAs), situated at $2,770 and $2,864 respectively. These levels currently act as resistance, and bulls need to flip them into support to confirm sustainable recovery.
Ethereum investment products turned the tide with inflows of $87 million after a five-week negative trend. According to CoinShares, this was driven primarily by spot Ethereum ETFs, which saw inflows of $58.7 million on Sept. 27. BlackRock’s ETHA also performed well with inflows of $11.5 million, pushing its net inflows above $1 billion.
This article does not offer investment advice. Each trading and investment decision involves risk and should be made with thorough research.
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