Gradual Decline in Gas Prices
Ethereum has recently experienced a significant drop in its daily mean gas price, an indicator of transaction fees on the network. This decline has reached an all-time low of 2.9 Gwei, showcasing a 25% price drop over the past month. While this is favorable for users who benefit from lower transaction costs, it raises broader concerns for Ethereum’s future, especially as more activity shifts to Layer 2 networks like Arbitrum and Base.
Historically, the Ethereum network saw gas prices surge past 400 Gwei during the 2021-2022 DeFi boom due to heightened network activity. However, since mid-2022, gas fees have been on a steady decline. This can be attributed to various updates, including the introduction of 'Blobs' in the Dencun upgrade. These innovations have significantly reduced costs for Layer 2 networks, allowing them to publish data on Ethereum at a fraction of the previous costs.
By 2024, Ethereum’s mean gas price had plummeted, with network fees reflecting this consistent decrease. As of now, the average gas fee stands at $0.85, the lowest in years. The daily mean burn rate has also fallen to 115 ETH, indicating a more efficient network but also highlighting increased supply, as Ethereum’s market supply has surged by over 197,000 tokens, amid the 25% price drop.
Increasing Whale Concentration
Despite recent developments like Ethereum ETFs, data from CryptoQuant and IntoTheBlock show a shift in market dynamics, with a growing concentration of wealth among large holders, often referred to as "whales." Since the Dencun upgrade, Ethereum’s price has declined by 35%, with supply continuing to rise.
Over the past 30 days, large holders have increased their ETH holdings by 2.87%, whereas smaller, retail, and mid-sized investors have reduced their stakes by 0.86% and 1.44%, respectively. This trend suggests that interest in Ethereum may be consolidating among fewer, more affluent investors.
Key Ethereum Support Zones Highlighted
As Ethereum’s price faces challenges, analysts have identified crucial support zones that could influence its market trajectory. Crypto analyst Ali Martinez pointed out the importance of the $2,300 to $2,380 price range, a level where 1.62 million addresses held over 50 million ETH as of August 16. This concentration suggests potential resistance against bearish market pressures at this level.
Disclaimer: This content is informational and should not be considered financial advice. Readers are encouraged to conduct thorough research before making any investment decisions.
