Quick take:
- ETH fees on the Ethereum network have continued to skyrocket.
- Yield Farming on DeFi platforms is one reason ETH fees are high.
- Some users of Ethereum believe such high fees are unsustainable.
- Ethereum (ETH) has however sidestepped the fud and broken the $400 price ceiling.
The DeFi boom has had a positive impact on the price of Ethereum in the sense that it drives up demand for ETH and has increased the number of active addresses on the network. In the case of the latter, there is a proven positive link between active Ethereum addresses and the price of ETH.
However, with high activity on the Ethereum network, comes the burden of high ETH fees due to congestion. According to Etherscan, the current average gas fee on Ethereum is approximately $2.65. This fact has led many ETH users to voice their concerns on social media about the future of the network to handle an influx of DApps.
Ethereum Sidesteps FUD on ETH Fees, Breaks $400
In terms of price, Ethereum seems to have brushed off the FUD and concerns regarding high ETH fees by managing to break the $400 price ceiling earlier today. Additionally, Ethereum has hit a new 2020 peak value of $431. At this rate, Ethereum could very much be on its way to fulfilling Arthur Hayes’ price prediction of $500.
Ethereum managing to break $400 despite high ETH fees could be attributed to the optimism regarding the implementation of ETH2.0 in the days and/or weeks to follow.
What Next for Ethereum in the Crypto Markets?
With $400 broken, traders and investors are anticipating that this level will be turned into a support zone in a manner similar to how $365 has a pillar for Ethereum in the past two weeks. In terms of resistance levels, the 2017/2018 crypto market cycle is the best area of reference when formulating these areas.
A brief glance back in time to this period reveals that Ethereum has the following resistance areas to contend with on its path to $500.
- $421 (current price level)
- $440
- $447
- $455
- $467
- $473
- $486
- $497