Ethereum Gas Fees Have Dropped 90% since November as the Merge Approaches
Crypto markets have closely watched Ethereum 2.0 developments as it plans to introduce a major upgrade in June 2022. In the run-up to the ‘Merge,’ reducing the ETH fee has been one of the key positive developments..
Ethereum Fees Keep Going Lower
As investors and analysts remain bullish on the altcoin, Ethereum could recover from its downtrend and climb to $4,000. The Ethereum blockchain’s high network fees, considered one of the largest obstacles to investment, have dropped 90% since November 2021
Over the last six months, the Ethereum fee has fallen by 90%, which has eased user concerns, according to on-chain data provider Santiment. According to the report, this could also account for the surge in ETH prices.
The data provider mentions, “Ethereum fees have been much more affordable than we’ve seen for the past 8+ months. The average gas fee sits at just $5.81. For comparison, average fees bloated to $69.57 on May 11, 2021, and $62.85 on November 8, 2021.”
Further, data provider Santiment mentions that Ethereum (ETH) is more closely related to the S&P 500 than Bitcoin (BTC). $ETH has benefited from this since the FOMC announcement three weeks ago. “Watch if fed news causes any downswings for the May FOMC update,” the provider says.
If the Fed raises the rate, the equities market may see a short-term correction. A similar effect may be seen in the cryptocurrency market and Ethereum (ETH) price. According to crypto market researcher Michäel van de Poppe, ETH has a buy zone about the $3,100 level in the event of a drop.
Notably, compared to bitcoin, the network’s fee income has increased 39 times, according to Crypto Fees, over seven days. Ethereum’s average fees have been $24.4 million during the past seven days, while bitcoin’s fees have been $623,000.
ETH Set to Rally this Quarter
Analysts are confident that Ethereum could become the next altcoin leader. Arthur Hayes, the CEO of BitMEX, believes that Ethereum’s price could surpass its layer-1 competitors.
Mark Cuban, the owner of the NBA’s Dallas Mavericks and a billionaire investor, feels the merger is one of the most optimistic and awaited events in Ethereum. In an interview with Fortune, Cuban stated that he is bullish about the Ethereum price outperforming other cryptocurrencies.
Notably, another favorable element driving Ethereum’s price increase is the increased connection with the S&P 500 and technology companies. Experts evaluated the Ethereum price pattern and forecasted a surge in crypto. According to FXStreet experts, the price of Ethereum has risen over the 200-day moving average, and signs on the altcoin’s chart remain optimistic. Analysts estimate that the price of Ethereum will rise to $4,000.
Ethereum is Set to Grow With New Upgrades
The launch of the EIP-1559 protocol has been one of the most significant advances in the Ethereum community. This protocol puts the Ethereum (ETH) price under deflationary pressure, which includes a burn mechanism. Meanwhile, Ethereum is likely to have a great few months ahead of it. Its developers are working on scalability upgrades, and the Kiln testnet merging is now underway. Despite the performance and gas fees, Ethereum has been in high activity from DeFi.
However, all that is about to change as ETH2 updates, now referred to as the consensus layer, get implemented. Ethereum will significantly improve performance, which will benefit both its price and general use. Later this year, the merge will go live on the mainnet. These factors, along with a growing market for DeFi and the introduction of new platforms, may encourage additional investment in the sector.
