The Ethereum price surged 1.03% during the low-volatility Sunday trading session to currently trade at $2,438.The upswing market is a recovery from weekday selling pressure fueled by a war-like situation between Israel and Iran. Will the correction trend extend as ETH L1 fees record an all-time low, promoting a reverse from the prior deflationary trend?
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$3K Ethereum Price Rally at Stake as Post-Dencun Inflation
Following the Dencun upgrade, Ethereumâs Layer 1 (L1) fees have witnessed a declining trend to hit an all-time low in mid-2024. The Intotheblock analytics shows the implementation of EIP-4844 has plunged the cost of Layer 2 (L2) transactions by 10x.
The sharp decline in L1 fees reflects the continuous growth of L2 solutions like Optimism and Arbitrum, which offer faster and more cost-effective transactions. While this move has bolstered Ethereumâs scalability, it has unintended consequences.
As fewer fees are being burned, the supply of ETH has entered an inflationary phase, reversing its prior deflationary trend. If crypto buyers struggle to demand pressure corresponding to the addition of supply, the Ethereum price prediction will witness temporary pullbacks and volatility.
In addition, the renowned crypto analyst Ali Martinez highlights a notable decline in Ethereum large holders with over 10,000 ETH balances. Since July, the whale holding has plunged 7%, indicating that smart money traders are mainly exiting in anticipation of price correction.
ETH Price Hints Major Breakout From Triangle
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Over the past two months, the ETH price has shown a sideways trend above $2,200 support. This consolidation in the daily transient Chart shows the price actively resonates between two converging trends and indicates a symmetrical triangle pattern formation. Theoretically, this chart pattern guides a temporary lateral move for prevailing trends to gain momentum.
As the crypto market experienced ease from geopolitical tension in the Middle East, the Ethereum price rebounded from $2,308 to $2,440, accounting for a 5.7% jump.
If the sellers breached the patternâs lower trendline at $2,200, the bearish momentum would accelerate and drive ETH Crash below the $2,000 level, thus delaying the $3K rally.
