Ethereum (ETH) has experienced a rise in its on-chain transaction fees, reaching levels last seen in April 2024.
Weekly gas fees surged to $67 million, up by 17.9%, largely driven by increased activity in decentralized finance (DeFi) platforms. The spike signals heightened usage of the Ethereum blockchain as traders and investors adjust their portfolios amid fluctuating market conditions.
DeFi Drives Ethereum Gas Fee Increase
The rise in Ethereum gas fees has been attributed to intensified usage of DeFi applications, according to a report by IntoTheBlock. DeFi platforms, known for facilitating trading, lending, and other decentralized financial services, saw a marked increase in activity over the past week. As users interact with these platforms, gas fees—which are required to process transactions on Ethereum—have climbed correspondingly.
Weekly Ethereum fees hit their highest levels since April, driven by significant DeFi activity and rebalancing in response to this week's $100K market retracement. pic.twitter.com/OX8bFLHS1r
— IntoTheBlock (@intotheblock) December 13, 2024
Additionally, Ethereum’s blockchain activity appears to have increased amidst broader adjustments in the cryptocurrency market. This coincides with Bitcoin’s brief drop below the $100,000 milestone, prompting many investors to rebalance their holdings. Institutional investors and traders have been actively shifting funds between cryptocurrencies, further contributing to Ethereum’s fee growth.
Market Movements Amidst Ethereum’s Price Fluctuations
While Ethereum saw an uptick in gas fees, its price movement has remained relatively subdued. As of press time, Ethereum was trading at $3,923.88, reflecting a slight 0.7% increase for the week. Despite this, the price has faced minor retracements, with a 24-hour decline of 0.49% and a 7-day decrease of 2.41%.
Market participants remain optimistic about Ethereum’s price trajectory. Many anticipate a recovery to the $4,000 mark, supported by the blockchain’s growing activity. Ethereum currently holds a market cap of $471.6 billion, with a circulating supply of 120 million ETH and a 24-hour trading volume of approximately $37.88 billion.
Historical and Projected Price Trends
Ethereum’s historical price trends provide a context for its current position. Between 2018 and 2020, the cryptocurrency surged from under $10 to $70–$80 following a breakout at the $25-$30 resistance level. From 2021 to 2022, Ethereum experienced another major rally, reaching its all-time high of nearly $4,800.
Analysts predict Ethereum’s next rally could push its price to $9,000–$10,000. Key support levels are noted at $1,500, $2,000, and $3,000, while resistance levels are seen at $3,500 and $4,800. Crypto analyst Yoddha expressed confidence in Ethereum’s potential, stating,
“Ethereum is going to hit $10,000 this cycle and no one can stop it.”
#Ethereum is going to hit $10,000 this cycle and no one can stop it pic.twitter.com/sxru5Cglqn
— Yoddha (@CryptoYoddha) December 12, 2024
Large Holder Activity and Exchange Netflows
Ethereum’s rising gas fees come alongside increased large-holder activity. Recent data reveals a 1,867.27% surge in the 7-day netflow ratio for large holders transferring assets to exchanges.
This trend suggests an active market environment, possibly indicating portfolio repositioning or selling. Over longer periods, 30-day and 90-day netflows have decreased by 49.55% and 191.75%, respectively, reflecting reduced exchange inflows following the initial spike.
Source: IntoTheBlock
The Ethereum blockchain continues to see dynamic activity levels, driven by evolving market factors and the growing popularity of decentralized finance applications.
FAQs
Why have Ethereum gas fees increased recently?
Ethereum gas fees surged to $67 million, up 17.9%, due to increased DeFi activity and portfolio adjustments by traders and investors.
What are Ethereum’s current price levels and key support points?
Ethereum is trading at $3,923.88, with support levels at $1,500, $2,000, and $3,000, and resistance at $3,500 and $4,800.
How has large-holder activity impacted Ethereum’s blockchain?
Large holders’ netflows to exchanges spiked 1,867.27% in 7 days, indicating heightened market activity and portfolio repositioning.
The post Ethereum Analysis: Gas Fees Surge 17.9% as DeFi Activity Increases —What’s Driving the Spike? appeared first on Coinfomania.
