- Ethereum gas fees plunged to an all-time low on Saturday as ETH supply continued its uptrend.
- Global Ethereum ETFs saw minor inflows of $4.2 million last week despite their US counterparts recording over $14 million in outflows.
- Ethereum could repeat historical move after breaching the lower trendline of a key ascending triangle.
Ethereum is down over 3% on Monday after posting weak flows across ETH ETFs and record lows in gas fees last week. The decline also coincides with ETH attempting to repeat a historical price move that it experienced in the last two years.
Daily digest market movers: Ethereum’s low gas fees coincides with weak ETF flows
In the past week, Ethereum's average daily gas fee reached an all-time low of 1.06 Gwei on Saturday, according to data from Ultrasound.money. Gwei is the measure for transaction fees on Ethereum.
ETH Gas Fees since the London Hard Fork
The reduction in gas fees also meant that the burn rate of ETH dropped to 115 ETH on Saturday, per CryptoQuant's data. While periods of record-low gas fees have often coincided with a price bottom in the past, the market outlook this time may be different due to the Dencun upgrade on March 13.
The Dencun upgrade introduced blobs, which allow Layer 2 networks to post data on the Main chain at significantly lower fees. As a result, ETH's burn rate — meant to offset new issuance — has continued falling.
Between April and August 2024, Ethereum's total supply has increased by over 220,000 ETH, and its price has fallen more than 30%. A sustained uptrend in supply could negatively impact ETH's price if demand declines or stays constant. This may be a potential reason for Ethereum ETFs not yet impacting prices.
Meanwhile, Ethereum ETFs recorded a net inflow of $4.2 million last week, according to CoinShares data. Although global inflows were positive, US spot ETH ETFs took in net outflows of $14.1 million. The weak inflows indicate caution among investors, as evident in choppy price movement and the ETH Fear and Greed Index at 34.
The ETH Fear and Greed Index measures investor sentiment toward Ethereum using values from 0 - 100. A heightened increase in the index suggests high greed, while decreasing values suggest FUD (fear, uncertainty and doubt).
ETH technical analysis: Ethereum poised to repeat key historical price move
Ethereum is trading around $2,570 on Monday, down over 3% on the day. In the past 24 hours, ETH sustained $30.8 million in liquidations, with long and short liquidations accounting for $28 million and $2.8 million, respectively.
Ethereum derivatives market indicates most traders are bearish, considering funding rates turned negative earlier today, according to CryptoQuant's data. Funding rates are periodic payments that long/short traders pay/receive when the price of perpetual futures contracts trades above or below that of its spot counterpart. It's also used as a sort of sentiment indicator to know whether traders are bullish or bearish.
Ethereum's funding rate is hovering around -0.0036 at the time of writing, indicating that short positions are dominant.
The bearish sentiment is also evident on the 4-hour chart, where ETH breached the rising lower trendline of an ascending triangle on Sunday. Such a move indicates that sellers are gaining momentum and could kick-start a dominant bearish trend.
ETH/USDT 4-hour chart
However, the Stochastic Oscillator during this time frame suggests that ETH could see a rebound after falling below the 20 mark and entering the oversold region. On the other hand, the Relative Strength Index (RSI) is signaling a bearish move after moving below its midpoint and moving average.
Meanwhile, ETH continues to face resistance around a descending trendline on the daily chart. The trendline, plotted from May 30 to September 29, suggests ETH may decline to the range of $2,000 to $2,200 in the coming weeks before seeing a major rally.
ETH/USDT Daily chart
ETH posted similar moves from August 2022 to November 2022 and July 2023 to October 2023. Additionally, the daily chart's Awesome Oscillator (AO) suggests that the bearish momentum is slowing down.
In the short term, ETH could rise briefly to $2,648 to liquidate positions worth $21.12 million.
Cryptocurrency prices FAQs
Token launches like Arbitrum’s ARB airdrop and Optimism OP influence demand and adoption among market participants. Listings on crypto exchanges deepen the liquidity for an asset and add new participants to an asset’s network. This is typically bullish for a digital asset.
A hack is an event in which an attacker captures a large volume of the asset from a DeFi bridge or hot wallet of an exchange or any other crypto platform via exploits, bugs or other methods. The exploiter then transfers these tokens out of the exchange platforms to ultimately sell or swap the assets for other cryptocurrencies or stablecoins. Such events often involve an en masse panic triggering a sell-off in the affected assets.
Macroeconomic events like the US Federal Reserve’s decision on interest rates influence risk assets like Bitcoin, mainly through the direct impact they have on the US Dollar. An increase in interest rate typically negatively influences Bitcoin and altcoin prices, and vice versa. If the US Dollar index declines, risk assets and associated leverage for trading gets cheaper, in turn driving crypto prices higher.
Halvings are typically considered bullish events as they slash the block reward in half for miners, constricting the supply of the asset. At consistent demand if the supply reduces, the asset’s price climbs. This has been observed in Bitcoin and Litecoin.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin struggles despite reduced miners' selling pressure
Bitcoin trades around $58,000 on Monday, down 0.7% on the day and extending the consolidation phase between $57,000 and $62,000 seen in the past ten days. From a technical perspective, the bearish thesis still prevails as BTC struggles to overcome key resistance levels and momentum indicators look weak.
Solana could make double-digit gains for three reasons
Smart contract blockchain Solana (SOL), a key competitor for Ethereum,has noted a 150% increase in its stablecoin supply, largely driven by increasing DeFi opportunities, liquidity and lending protocols and expansion of projects from Ethereum ecosystem to Solana.
Vitalik Buterin moves 400 Ethereum, ETH hovers around $2,600
Vitalik Buterin, co-creator of Ethereum, the largest altcoin in the crypto ecosystem, moved ETH to a crypto mixer, early on Monday. The mixer is known to effectively prevent malicious actors and protect user privacy.
Dogecoin whales surge by 50% in 30 days, here’s what this means for DOGE
Dogecoin, the largest meme coin in the crypto ecosystem noted a surge in whale wallet holdings. Data from on-chain intelligence tracker IntoTheBlock show a 50% increase in the count of wallet addresses holding over 10 billion DOGE.
Bitcoin: Signs of weakness persist
Bitcoin (BTC) trades above $58,000 on Friday after after testing and failing to overcome the resistance level around $62,000 earlier in the week. The risk-on mood returned to markets this week, Marathon Digital added 4,141 BTC worth $249 million to its holdings and the US SEC approved a MicroStrategy leveraged ETF, potentially giving investors more exposure to Bitcoin.