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Ethereum Transaction Fees Hit 4-Year Low: Will ETH Price Recover Now?
In a shocking turn of events, Ethereum’s transaction fees have plummeted to their lowest levels in nearly four years. This drastic drop has sent shockwaves throughout the cryptocurrency community, leaving many wondering if this is a sign of reduced network activity or potentially a precursor to a market rebound.
At its core, Ethereum’s declining transaction fees are a result of decreased network activity and growing sell pressure from long-term holders. According to Santiment data, daily active addresses have fallen to 461,000 in mid-March, down from 717,000 earlier this year. Additionally, the realized cap HODL wave has hit its lowest point since August 2023, indicating increased sell pressure from long-term holders.
The growing popularity of Ethereum’s layer-2 solutions, such as Arbitrum, Base, and Optimism, can also be attributed to lower fees and faster speeds. This shift in demand has naturally led to a decrease in the cost to complete transactions on the main network.
So, what does this mean for ETH’s price? In short, not much is expected to change unless Ethereum breaks above $2,000 and holds that level. The current consolidating price action around $1,852, with a 2.81% rise over the past 24 hours, suggests bearish momentum is fading.
Furthermore, key technical indicators such as the Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are no longer suggesting strong selling pressure, potentially indicating that Ethereum’s price could rebound in the short term.
Source: https://coinpedia.org/news/ethereum-transaction-fees-hit-4-year-low-will-eth-price-recover-now/
