Ethereum could witness a price dip as whales take profit
Ethereum (ETH) faces possible sell pressure, one crypto analyst says, citing how it surpassed the $2,300 mark. Whales have been actively taking profit, and this could trigger a massive sell pressure on the world’s second-largest crypto.
Ethereum price volatility
The price of Ethereum (ETH) has been positively impacted by the recent bullish momentum in the global crypto markets, fueled by Bitcoin’s (BTC) surge above the $43,000 price region.
ETH maintains a distinctive market position attributed to its extensive developer community, widespread adoption, and pivotal role in decentralized finance (defi) and various blockchain applications.
Despite the current positive momentum, there are apprehensions regarding the potential influence of selling pressure from whales on the cryptocurrency’s price.
According to crypto analyst Ali Martinez, whales immediately took profits after Ethereum hit $2,300.
The impact of significant holders selling could potentially drive down the price of ETH in the coming weeks. In a bearish scenario, the cryptocurrency might retest the $1,555 support level, and sustained selling pressure could push ETH as low as $1,460 within the next two months, the analyst predicts.
Despite these concerns, the overall market sentiment remains cautiously optimistic, leaving room for potential further growth in the cryptocurrency’s price.
Although Ether’s market capitalization of $282 billion lags behind Bitcoin’s $857 billion, both networks generate comparable protocol revenues.
In the last seven days, the Bitcoin network accrued $61 million in fees, while Ethereum accumulated $61.5 million.
In addition to institutional interest, the price surge is fueled by expectations of an ETF approval from the SEC. Despite the optimistic momentum, there are apprehensions, that the upswing in selling pressure might have repercussions on the ETH price in the coming days.
Ethereum’s surging network fees
The rise in Ethereum’s network fees is intricately tied to the expansion of its DeFi ecosystem and the widespread adoption of non-fungible tokens (NFTs).
Increased defi and NFT activities have driven up network fees, with more individuals engaging in intricate transactions, leading to prolonged periods of elevated fees.
The creation, transfer, and trading of NFTs involve smart contract executions that consume gas, and the associated costs can fluctuate based on network congestion and gas prices. While Ethereum’s high gas fees pose challenges for NFT creators and collectors, emerging solutions like Layer 2 scaling and gas optimization provide optimism for a more cost-effective and accessible NFT ecosystem.
The surge in DeFi and NFT activity on the Ethereum network since 2020 has resulted in extensive transaction activity, contributing to the persistently high gas fees.
Currently, the average gas fee for minting an NFT on Ethereum is around $100, subject to variations based on network congestion, gas prices, and smart contract complexity.
At the time of writing, Ethereum is trading at $2,348.23, according to Data from CoinGecko.
Credit: Source link
