Ethereum’s recovery rally came to an abrupt end as the price of the largest altcoin project in the market dropped drastically after the opening of Asian markets. As the chart shared by Alex Kruger suggests, the market saw relatively large selling volume as Asian bears began actively selling their ETH holdings. Here are the details…
Alex Kruger shares investor behavior in leading altcoin ETH
Investors trading ETH in Asian regions started selling their ETH. Therefore, they have increased the liquidation volume in the Ethereum market to almost $100 million. As we reported as Kriptokoin.com, ETH lost almost 10 percent of its value in one day. This marks the cryptocurrency’s third failed attempt to break the $1,600 threshold. While ETH has managed to secure a foothold above the 50-day moving average, the fate of the recovery rally is questionable as ETH has failed to reach new highs.
Asia woke up and chose to run everybody's stops. That's a 10% 1-day round-trip for ETH. pic.twitter.com/VgLxMSfWzf
— Alex Krüger (@krugermacro) July 25, 2022
Some traders say that what we see in the cryptocurrency market today; He believes there is a bear trap that will be the catalyst for another shift that will push the BTC price to new lows. Meanwhile, with the upcoming Merge update, Ethereum will eventually become deflationary as net asset issuance will reach 4.5 percent. Unfortunately, according to experts, the fact that the supply of ETH will begin to gradually decrease in the future is not enough to force the price of the asset to a new ATH. As the market performance of ETH shows, investors are not willing to buy more coins due to the dwindling supply.
The main driver of ETH is the use and adoption that comes with the blossoming of various Ethereum-only use cases. Currently, Ethereum is struggling and consolidating near $1,525. It has lost more than 5 percent of its value in the last 24 hours. It is losing 10 percent from yesterday’s high.
Transaction fee on Ethereum network is at its lowest in 2022
According to data provided by blockchain data platform Dune Analytics, Ethereum’s seven-day average fee hit its lowest level in 2022. It fell to just 16,98477 Gwei (about $7.51). During the 2021 bull market, the Ethereum network was constantly plagued with exorbitant fees, averaging around $40. This has led to the rise of alternative platforms like Solana. The fees in ETH have made Blockchan unaffordable for the common man.
Meanwhile, Ethereum fees remain relatively low, despite the fact that the price of the top cryptocurrency experienced a significant rally last month. On Sunday, Bitcoin price rallied to $1,664, the highest since early June, before reversing lower. So, will Merge cut gas fees? The recent price increase came on the cusp of the highly anticipated merge upgrade, which will allow the network to switch to the proof-of-stake algorithm.
While Ethereum 2.0 will consume much less energy compared to the proof-of-work of the second largest cryptocurrency, Merge will not immediately cut gas fees. Earlier this month, DeFi trader Vivek Raman explained that fees are not a function of the consensus mechanism. Therefore, users will have to use other Tier-2 solutions to spend less money on transactions. The Ethereum 2.0 upgrade was originally supposed to come with sharding, the technology that splits the main chain into many parts. However, this is no longer the case. Therefore, aggregation operations will not reduce the fees and solve the scaling problems of the network.
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