- Staking rates and gas fees on Ethereum are starting to drop as the meme coin craze dies down.
- On a daily chart, ETH selling pressure exceeds buying pressure.
The hype around meme-based tokens on Ethereum [ETH] network that ramped up staking rate begins to decline as focus shifts to BRC-20 tokens on Bitcoin [BTC] network.
According to data from bakencha.inEthereum stake rates, which climbed to a post-merger high of 8.6% on May 5 due to increased on-chain gas fees, have started to fall. At the time of writing this was 6.72%.
Source: beaconcha.in
The meme coin frenzy on the Ethereum network was mainly due to the unexpected launch of meme token Pepe [PEPE] and the astronomical rise in trading activity and value over the following weeks.
According to a April 30 tweet according to on-chain data provider Nansen, the number of PEPE holders passed 54,000 in just two weeks. Fueled by its addition to Binance’s Innovation Zone on May 5, the meme coin’s market cap passed the $1 billion mark.
54,000+ $PEPE holders in just 2 weeks? 🤯
Impressive, but let’s not forget the 1.3 million $SHIB holders there!
And did you know that more than 3,350 wallets contain both memecoins?
Let’s dive into the top holders of these two 👇 pic.twitter.com/VmJPdJZQEY
— Nansen 🧭 (@nansen_ai) April 30, 2023
However, as profit taking increased and trading volume decreased, PEPE’s trading volume declined rapidly and its market cap was below the $1 billion mark at the time of writing. At the time of writing, the value was down more than 50% from its all-time high of $0.000004354, set just five days ago.
Gas rates have also started a downward trend
Due to increased on-chain activity on Ethereum, the median average transaction fee on the network rose to its highest level since May 2022 as PEPE recorded massive trading activity.
However, as the token’s trading volume decreases, gas costs on the Ethereum network have also gone down.
While still at a year-high, the daily median gas allowance was 87 gwei at time of press, down from a record 143 gwei on May 5.
Source: Dune analysis
ETH on a daily chart
At the time of writing, the leading altcoin was trading at $1,836.81. After falling from a 2008 high of $6 on May 6, selling pressure has surged since then.
On a daily chart, the main momentum indicators remained below their respective neutral spots, indicating that selling pressure outweighed buying pressure. For example, ETH’s Relative Strength Index (RSI) was 44.97. Similarly, the Money Flow Index (MFI) was 48.24.
Also below the centerline was the Chaikin Money Flow. At -0.05 at the time of writing, ETH was experiencing a liquidity exit, which could see the price fall further.
Source: ETH/USDT on TradingView
