Ethereum’s network demand and bullish price action support the rise in gas prices. The net outflow from the ETH exchange is supporting bullish dominance despite the market slowdown.
The Ethereum network has been criticized in the past for its high fees. This is often the case, especially when there is a lot of network usage and when the price of ETH is rising.
The latest price of ETH suggests this will continue into 2023 as the market moves towards a recovery.
Realistic or not, here is the market cap of Ethereum in terms of BTC
One of the latest Glassnode alerts revealed that the median gas price of ETH is now at a new monthly high. This is not surprising given that we have seen a strong recovery in the amount of on-chain activity since the start of the year. It confirms that the demand for networking has improved significantly.
📈 #Ethereum $ETH Median gas price (7d MA) just reached a 1-month high of 23,128 GWEI
The previous 1-month high of 23,097 GWEI was observed on January 19, 2023
View stats: https://t.co/6QGDfZoULY pic.twitter.com/s7TzVcGIEF
— glassnode alerts (@glassnodealerts) February 4, 2023
Why are gas prices rising?
There may be more than one factor influencing gas fee prices, as has been the case in the past. One is that higher network demand causes congestion and increased demand for ETH and tokens used to pay for the price of gas.
The other reason is that this is a common occurrence during a bull market. The same principle applies, with demand for the underlying cryptocurrency or token driving up the price.
The second reason probably has the biggest impact on prices. Both factors played a role over the past four weeks, during which ETH managed to post a 40% increase. Well, at the time of writing, ETH was trading at USD 1680.
Source: TradingView
The current price of ETH is one to watch as it is in a resistance zone that it has struggled to overcome in recent days. Whether it breaks out, stays within the current range, or returns is still a toss-up.
A look at some of its stats can provide insight into where it is currently leaning.
Is your wallet green? Check out the Ehereum Profit Calculator
Both network growth and transaction volume have remained at remarkable levels over the past four weeks. However, the same metrics crashed to their lowest monthly levels in the past 24 hours. This may indicate a drop in organic demand within the Ethereum network.
Source: Sentiment
While there is no clear explanation for this observation, one speculative reason could be the FUD that persisted throughout the week across economic data and FOMC.
However, this does not explain why the price of ETH has remained in the green since early February. ETH exchange flows provide a clearer perspective on the current situation.
Source: Glassnode
Alternating currents have been spinning for the past 48 hours and following a downward trajectory. This is an acknowledgment of a demand delay as noted earlier.
Nevertheless, the amount of foreign exchange outflows remains higher than inflows. This is why the bulls have kept control, albeit barely.
This post Ethereum is staring at a cliff as the median gas price rises to a monthly high
was published first on https://ambcrypto.com/ethereum-stares-down-a-cliff-as-median-gas-price-soars-to-monthly-high/
