Why Ethereum Fees, Delivery May Be ETH’s Ticket To A New Height

• Stock supply fell as near-term price action tilted upwards.
• ETH experienced high liquidity despite low network congestion.

According to Santiment, Ethereum [ETH] fees were back at March lows. During that period, ETH traded hands just over $1,700. But a few weeks later, the altcoin surged to $2,100.

Read Ethereum [ETH] Price prediction 2023-2024

Hailed as the backbone of Decentralized Finance (DeFi), Ethereum costs are determined by network traffic. So when the demand for transactions is high and the need for validator verification on the network increases, the cost rises.

But lower costs appear when there is less accumulation on the blockchain. While these fees have been a bone of contention for Ethereum users, they may in fact hold the key to unlocking ETH’s potential to reach new highs.

Diminishing downtrend for the altcoin king

Just like the on-chain data platform mention, the supply of ETH on exchanges has continued to increase. For context, the supply on exchanges is an indicator of the percentage of circulating supply stored on portfolios provided by centralized exchanges.

Typically, a rise in the metric can have bearish implications. But a drop in the metric indicates bullish belief while the ETH price will come under pressure in the long term.

According to the price action, the Know Sure Thing (KST) indicator was in the negative region. Usually, a positive reading of the KST indicates diminishing upside momentum. So the falling KST suggests that ETH’s drop from $1,900 may be short-lived, with $2,000 just moments away.

Source: TradingView

In terms of the exponential moving average (EMA), the ETH/USD daily chart showed that the trend is currently bearish. This was because the 20 EMA (blue) was below the 50 EMA (yellow).

However, 50 EMA tended to cross the 20 EMA provided demand increased. If this happens, ETH could turn bullish as suggested by the KST.

More eyes on Ether

Furthermore, on-chain data showed that ETH’s Open Interest (OI) has maintained its rise since June 19. The OI acts as an important indicator of the commitment of the options and futures contracts to a particular cryptocurrency.

As ETH’s Open Interest has increased, this means there is high liquidity for short and long positions. This could also serve as a bullish signal for the altcoin.

However, traders may need to watch out for the period when the OI becomes too high. In such a situation, the asset may turn bearish depending on the broader market trend.

Source: Sentiment

Realistic or not, here it is The market cap of ETH in BTC terms

In addition, 24-hour active addresses, which had initially skyrocketed, had declined. At the time of writing, the statistic was down to 391,000. This indicates that unique visits to the Ethereum blockchain have been reduced.

Historically, there has not been a constant correlation between the active addresses and the ETH price. Thus, the drop in the metric can have negligible effects on the price action.