Ethereum Blobs Dominate Burn Leaderboard
Recent data reveals that blob fees have burned over 500 ETH in the past week, surpassing Uniswap and ETH transfers as the top contributors to Ethereum's burn mechanism. This marks a shift from the trends observed in 2024.
The Dencun upgrade in March introduced blobspace to Ethereum blocks, significantly improving Layer 2 (L2) scaling and reducing transaction fees. However, this fee reduction had an unintended side effect: a decline in ETH burns, leading to an increase of over 400,000 ETH in supply between April and December.
Recently, as Layer 2 networks have experienced higher transaction volumes, the average blob count per block frequently exceeded the target of 3.0. This excess usage triggered price discovery mechanisms, compelling L2s to pay additional transaction fees, thereby increasing ETH burns.
If this trend persists, especially as network activity picks up post-holiday season, it could flip the negative sentiment surrounding blobs. This shift may bolster Ethereum’s "ultrasound money" narrative, enhancing its appeal to investors.
ETF Outflows Amid Market Consolidation
Despite positive on-chain developments, Ethereum ETFs recorded net outflows of $55.4 million on Monday, ending a four-day inflow streak, according to Coinglass data. This reflects broader market hesitation as the crypto sector consolidates.
Ethereum Price Forecast: Key Levels to Watch
Ethereum has been range-bound between $3,250 and $3,550 over the past 12 days, mirroring low trading activity during the holiday season. In the last 24 hours, Ethereum liquidations totaled $31.19 million, with long positions accounting for $19.37 million and shorts contributing $11.82 million.
Downside Scenarios:
A break below $3,250 could lead ETH to test the $3,000 psychological level, completing the double-top pattern formed in December.
Failing to hold $3,000 may trigger heavy selling pressure, pushing ETH toward $2,817 key support. A daily close below this level could send ETH down to the $2,200 region.
Upside Scenarios:
Sustaining a high-volume breakout above $3,550 could lead ETH to retest the $4,093 major resistance.
A successful move past $4,093 might position ETH to challenge its all-time high resistance at $4,868.
Momentum Indicators:
The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are currently below neutral levels, signaling bearish momentum.
A crossover above neutral levels could indicate the resumption of an uptrend for ETH.
Conclusion:
As Ethereum consolidates within a tight range, its price direction for early 2025 will depend on key levels at $3,250 and $3,550. On-chain metrics like blob burns and market sentiment surrounding Ethereum's deflationary narrative could further influence its trajectory. If ETH breaks out of its consolidation phase with high volume, it could aim for new all-time highs, making 2025 a pivotal year for the second-largest cryptocurrency.
