The cryptocurrency Ethereum (ETH)
$2,654 has recently experienced an extraordinary surge of nearly 50%, surpassing the $2,700 mark. Just a few weeks ago, Ethereum had fallen below $1,800, but it now targets the $3,000 threshold. As optimism replaces pessimism on social media, reduced transaction fees and strategic moves by large investors are coming into focus. The market is actively debating the dynamics that have led to this sudden movement.
Transaction Fees Support Ethereum’s Ascend
Recently, the average transaction fees on the Ethereum network have plummeted to $0.84, much lower than six months ago when they were $7. This reduction makes the network more accessible for users, boosting its potential to attract new investors. However, experts caution that if fees rise above $2, the upward trend might be at risk.
Despite increased network activity, the lower fees showcase the impact of Ethereum’s scalability solutions. The adoption of Layer 2 protocols, in particular, has alleviated network load, stabilizing transaction fees. Although this supports the price in the short term, concerns remain that sudden demand spikes could strain the network again.
Major Investors Accumulate Ethereum
Data from Lookonchain reveals that the fund Abraxas Capital purchased $84.7 million worth of Ethereum on May 13. Over the last six days, the company has accumulated a total of 211,000 ETH, totaling $477 million, creating substantial buying pressure in the market. This strategic move has played a crucial role in Ethereum’s rapid price increase.
Technical indicators are mostly delivering positive signals. ETH continues to trade above its 50, 100, and 200-day moving averages, supported by the MACD indicator. However, the RSI reaching 79 signifies entry into the overbought territory. Experts anticipate that if the $2,750 resistance is crossed, $3,000 may be tested. Conversely, if the price drops, a pullback to $2,100 could occur.
