Ethereum’s gas costs increased as a result of Binance’s Proof-of-Reserves efforts
Activity on the network increased, but sentiment against Ethereum fell

There has been a huge spike in the past few days Ethereum [ETH] gas fees and gas consumed. This huge spike was caused by Binance moving large amounts of Ethereum for their Proof-of-Reserves efforts.

Read Ethereum [ETH] Price prediction 2023-2024

Ethereum is propelling forward

As shown in the image below, Ethereum’s gas fees hit new highs, rising to 222 gwei. According to Wu Blockchain, this happened because:

“Binance consolidated funds from numerous deposit addresses to the Binance14 hot wallet in preparation for the next phase of POR scrutiny.”

This led to Binance generating 889 ETH gas fees and transferring over 437,000 ETH in an effort to get his Probbery of reserves and maintain the trust of its customers.

However, this spike in gas fees may have had a negative impact as high gas fees can affect retail investors and affect overall sentiment towards Ethereum.

The chart below shows that weighted sentiment towards Ethereum was negative. Despite this, great addresses kept piling up ETH.

As shown in the chart below, the percentage of Ethereum held by major addresses grew significantly after November 16. This support from major addresses could help sustain Ethereums grow.

Source: Sentiment

Another positive for Ethereum would be the spike in network activity.

The number of active addresses on the Ethereum network has grown significantly over the past two weeks, reaching 33.3,000 addresses at the time of writing.

Combined with the aforementioned information, the number of addresses holding more than 0.01 ETH also hit a four-month high of 22,000 addresses, according to Glasnode.

Are investors ‘short-sighted’?

Despite the large addresses and high activity on Ethereum’s network, traders lacked confidence in Ethereum’s growth.

The image below showed that the funding rate for Ethereum fell. For example, there were more traders taking short positions against Ethereum and they were willing to pay long-term traders.

Source: CryptoQuant

It has yet to be determined whether these short sellers can take profits.

At the moment of writing, ETH traded at $1,272.6. The price is up 0.62% in the last 24 hours.

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