TL; DR Breakdown
- Ethereum gas fees drop drastically.
- The asset is presently eyeing another all-time high.
- Ethereum continues to prepare for The Merge.
Despite the abundance of digital assets across the crypto sector, most traders only go to cryptocurrencies are the top two, Bitcoin and Ethereum. Although Bitcoin is said to have gathered much of its worth, Ethereum is presently undergoing bill runs to touch new highs. In a recent report, Ethereum gas fees have drastically reduced over the last five days. This is happening as the digital asset is ramping up to touch above $4,000 in the coming days.
Gas fee reduction means traders are not purchasing Ethereum
Ethereum is presently on sale for $ per token, with its average transaction fees said to be around $37.19. The present gas fees signaled a drastic reduction of 33.5% compared to last Tuesday when the transaction fee was $56. Asides from that, Ethereum’s hash rate, the metric used to measure the overall computing power, has continued to scale new highs.
Last week Monday, the hash rate of the asset was around 812,000 GH/s, but a close look at it on Wednesday showed that it already skyrocketed to stay at approximately 821,000 GH/s. But while the hash rate of the second digital asset is still on its way up, the reduction in gas fees can only mean one thing: traders are not buying the asset. Another figure to back that claims up is the trading volume of the cryptocurrency, which has reduced drastically in the last four days.
Ethereum is ramping up preparations to debut The Merge
Ethereum has been seeing a decline in the number of trades made on the blockchain in the past few weeks. For instance, on Wednesday, a total of $21 billion worth of transactions was carried out on the chain. As of yesterday, the figure deepened further, with the network witnessing a total trade worth $14 million. During the period, the market capitalization of the digital asset also dipped, losing $10 billion during last week.
Presently, the market capitalization of the token is a little bit above $530 billion. While that is something to worry about, Ethereum supporters still take solace in the popular NFT market that has driven the adoption of the network higher. Chicago Mercantile Exchange has also announced that it would provide traders with the opportunity to trade Ethereum derivatives. This opportunity will allow traders to carry out a small portion of trades on Ethereum futures.
Ethereum is also working on the debut of its 2.0 framework, which will bring faster transaction periods and lower gas fees. With Ethereum recently launching its beacon chain, it will provide the framework for The Merge. The Merge introduces a proof of stake mechanism that will override the current proof of work system that is being used. All this points out that traders might be holding off on buying Ethereum now, and an increased hash rate might mean a reduction of the load on the blockchain.