Ethereum (ETH) is currently trading around $2,700 today, up more than 2% after transaction fees spiked 498% over the past ten days. ETH is currently struggling to reclaim key support at $2,817.
Ethereum Transaction Fees and ETH Burning Soar
Transaction fees on the Ethereum network have hit a seven-week high thanks to a surge in on-chain activity, according to a report from Coinbase.
Coinbase analysts David Duong and David Han said that trading volumes on decentralized exchanges (DEXs) and ETH transfers increased by 7% and 19% respectively over the past week, leading to a spike in transaction fees.
The surge in transaction fees has also led to a surge in the number of ETH burned daily, which increased by more than 900% to 2,097 ETH on Thursday, according to data from CryptoQuant.
The increase in gas fees and ETH burned could put deflationary pressure on Ethereum, while also signaling the emergence of strong bullish momentum from investors.
Meanwhile, Ethereum ETFs saw a slight net outflow of $0.1 million on Thursday, the lowest negative inflow day since the fund launched. BlackRockâs ETHA and Fidelityâs FETH continued to attract positive inflows, totaling $15.3 million and $15.9 million, respectively. Grayscaleâs ETHE, on the other hand, saw net outflows of $36 million after two flat days.
ETH Prepares for Strong Growth in the Coming Months
ETH was trading at $2,690 on Friday, up 2.2% on the day. According to data from Coinglass, ETH saw $18.85 million worth of liquidations in the past 24 hours, including $6.66 million from buy orders and $12.19 million from sell orders.
Over the past week, Ethereum has broken through a key downtrend line that has been holding back the price since June. If ETH continues to hold above this trendline, there is a high probability of a strong rally in the coming months.
ETH's price history shows similar strong rallies from August to November 2022 and from July to October 2023, when ETH broke the downtrend line and recorded gains of 94% and 164% respectively in the following months.
In the short term, ETH is struggling to hold above the $2,707 resistance level. If successful, ETH could continue its recovery and reclaim the important $2,817 level.
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) momentum indicators are both in positive territory, with the AO showing continuous green bars, reflecting Ethereumâs strong bullish momentum.
However, if ETH price closes below the $2,207 support, the bullish thesis will be invalidated.
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