Can Ethereum ETH sliding fees propel the coin to $2k?
Ethereum ETH is trading at almost $1800 today but can the drop in its sliding fees help propel the price of the coin to $2k?
Ethereum transaction fees or also known as gas fees tend to increase with an increase in the demand for the coin. As there are little blocks on the blockchain and the miners prioritize transactions with higher fees.
Santiment recently pointed out something really important in their tweet. They indicated that the transaction fee of Ethereum is below $2 despite the increase in demand. This can be interpreted as a positive sign for the network. Moreover, the decline in the transaction fees makes is more it more affordable and thus attracts more users.
Continuing to trade sideways is still a potential option
When the price of Ethereum ETH was at $1670 its transaction fees reached a Year-to-Date high of $4.26 on 14th February. But after that, the costs dropped to $2.82 which must attract more investors to participate and accumulate ETH. This is a positive sign for ETH as its price could reach $2k. The same was the price last year in May 2022 and it is speculated that the price might go up again soon.
However, there is a potential obstacle in the path of growth for Ethereum ETH, as evident from the network growth metric. It suggests that there has been a decrease in the number of active addresses on the network to 32,200. This means that Ethereum is still not gaining enough attention from users in the market. And it could highly impact the demand for ETH in the future and its price as well.
Furthermore, within the last seven days, there has been an increase in the number of active addresses on the network, reaching a total of $2.1 million. But that is likely due to the existing users and not the new ones.
As the active addresses are mostly due to the existing users becoming more active. Especially after the favorable improvements in the system. As new users would more likely create new wallets. But since they are already using the old ones it suggests that the number of new users is not increasing.
Ethereum can still rise
Seller exhaustion is another aspect that supports the growth of Ethereum. Despite the trends in the active addresses and user activity. Seller exhaustion determines the percentage of ETH in profit in relation to 30-day price volatility. According to this idea when the percentage of supply in profit is high and the price volatility is low, it is an indicator of the presence of fewer sellers in the market. Which can determine that the price has reached its bottom and is expected to grow.
The seller exhaustion constant has risen to 0.033 which indicates that the number of sellers has reduced. This means ETH has the potential to increase further.
According to Glassnode’s Data, there is a high level of demand for pure ETH transactions, which could have a positive impact on the short-term price of Ethereum. Nonetheless, there are still several other factors that could impact the price of ETH.