Ethereum price analysis: Gas fees are at a low – but so is DeFi use
Ether's increased correlation with Bitcoin over the past month or so suggests that the ongoing bear market may still not be completely over
- Despite its sluggish performance through the course of June, ETH is still showcasing year-to-date gains in excess around 145%.
- The average price of facilitating a transaction on the Ethereum network is currently at a six-month low.
- Last week, an Ethereum wallet address moved a sizable sum of 81,760 ETH to an external Binance account.
The last 24 hours have been quite tumultuous for Ether, the world's second largest cryptocurrency by total market capitalization, as is highlighted by the fact that after the premier altcoin dipped to a relative low of AU $2,370, it was able to rebound almost immediately and scale up to a price point of around AU $2,650. At press time, ETH is trading for AU $2,614.
In regard to what lies ahead for Ether, experts believe that if Bitcoin were to crash once again in the near term, the altcoin market as a whole could follow suit and witness a drop of unparalleled proportions. "[Altcoins] carry a significantly more downside risk than Bitcoin. If BTC were to fall lower, losing another 30% worst case, I'd expect [altcoins] to correct to do 2x worse from here.", FlibFlib, independent market analyst and co-founder of Decentrader, was quoted as saying.
Furthermore, since mid-April — a time when Ether scaled up to a relative high of over AU $5,730 — the currency's value has less than halved. Even then, the asset is showcasing solid year-to-date profits in excess of 140%.
Gas fee rates currently at annual lows
All through Q1 2021, discussions surrounding Ethereum's rising gas fees had continued to attract the attention of crypto enthusiasts worldwide. This is because during March and April, the cost of facilitating a transaction on the Ether network rose as high as US $45 and US $70 respectively — essentially rendering the platform useless for small time traders as well as independent developers.
That being said, as a result of the ongoing market-wide decline, Ethereum's native fee rates have dropped substantially, even hitting their lowest levels in nearly 180-odd days — with the average tx cost currently sitting at just <$0.15 or approx. 5 Gwei.
Not only that, it also bears mentioning that daily volumes across the DEX landscape have been slipping. In this regard, prominent decentralized finance (DeFi) platform UniSwap has seen its 24 hour trade volume dip from a whopping US $2.62 billion to around US $885 million since mid-May.
As the crypto market continues to be faced with a lot of financial uncertainty, experts are still not sure as to how Ether will fare in the near to mid term, especially as the asset continues to showcase an extremely high level of monetary correlation with Bitcoin.
Lastly, amidst all this turbulence, data released by blockchain analytics provider Crypto Whale shows that just a few days ago, a sizable sum of 81,760 ETH (from a single wallet) was moved to a Binance account.
Disclosure: The author owns a range of cryptocurrencies at the time of writing