Low Transaction Fees Promote Ethereum’s Gradual Rebound
Data from Santiment suggest that a recovery is on the way for Ethereum, albeit a gradual one. According to a post on Twitter, the all-time high (ATH) of $4,858 may be a far-off target, but fundamental factors are pointing in the right direction for the flagship altcoin.
ETH achieved an ATH of $4,858 on November 10, 2021. It dropped from this level partly due to the consequences of bloated fees. At the time, average transaction fees on the blockchain were over $60. As a result, several projects left Ethereum for other competing blockchains.
Santiment’s report shows that there has been a significant crash in Ethereum’s transaction fees. From above $60 in 2021, it has fallen to below $2 as of the time of the report. It forms the basis for predicting an imminent recovery for the largest DApps development platform.
💸 #Ethereum may still have a long way to recover back to its $4,858 #AllTimeHigh on Nov 10, 2021. $ETH got hit, in part, due to egregious $60+ average fees then. But now at under $2 per transaction, ease of utility could allow a continued gradual rebound. https://t.co/R36h8lABGP pic.twitter.com/mJiRH3gA5t
— Santiment (@santimentfeed) January 11, 2023
The ease of utility this promotes is why several DApps may return to the platform and new ones created. Repopulation of the now more efficient blockchain should initiate a long-term demand that supports the predicted recovery.
Transaction fees on Ethereum crashed as a result of the blockchain’s evolution. The original Proof-of-Work (PoW) algorithm of Ethereum was overhauled. The process of implementing Ethereum 2.0 transformed the blockchain into a Proof-of-Stake protocol. Some aspects of this transformation imply that transactions on the blockchain are faster and cheaper.
Ethereum’s recovery is projected to be gradual, considering its organic composition. It is expected to be powered by adopters embracing the blockchain for utility purposes. The attraction this time will be partly due to the collapsed fees, as noticed in Santiment’s report. ETH’s price recovery coincides with the average fees on the blockchain dropping below $3 in the middle of June 2022.
Whatever the situation, Ethereum remains part of a larger blockchain and cryptocurrency industry influenced by several macroeconomic factors. Nonetheless, users are optimistic that the best days of the technology are ahead.
