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Ethereum transaction costs rise – Ether price threatens correction by has risen 19.65 percent in the past seven days. At a current ether price of $ 3,892, the ETH lost 1.13 percent of its value in the past 24 hours. The market capitalization is $ 457.5 billion, which is about $ 350 billion away in third place.

Ethereum triumphal march causes transaction costs to rise

With the success of the Ethereum blockchain, ether gas prices are also increasing. The ecosystem created to calculate and confirm transactions is based on the fundamentals of supply and demand. Demand inevitably increases with popularity, while the computing power of miners cannot keep up with this development.

As a result, transactions on the mainnet (Layer 1) cost an average of over 30 dollars, which makes the services offered an expensive undertaking.

Combination of Ether Transactions

The developers have been confronted with this problem for a long time and an interim solution has been found. The integration of a Layer 2 component makes it possible to bundle compatible transactions and only then synchronize them with Layer 1. As a result, the transaction costs in the form of gas are only due once. The combined transactions thus share the costs.

This process is so successful that, according to CoinMetrics, more transactions are now processed on Ethereum Layer 2 than on the blockchain.

The analyst Evan Van tweetedthat yesterday 250,000 Ethereum transactions were processed on Layer 2, while it was only 210,000 on Bitcoin.

There is still a lot to do for Vitalik Buterin’s Ethereum team. The hope lies in Ethereum 2.0, an upgrade with which one wants to implement the required scalability.

Perhaps the situation will ease itself, however, when multitudes of developers switch to Cardano from September 12th. According to Charles Hoskinson, the rollout of the Alonzo upgrade is due to take place on September 12th, which will finally make the ADA smart contract capable.

Ethereum technical analysis

Ethereum put in an impressive rally on the daily chart. This began on July 20 at an ether price of $ 1,720 and reached its preliminary high of $ 4,024 on September 3.

The negative divergence of the RSI should be a warning sign to the bulls. While the price continued to climb from mid-August to early September, the RSI did not reach a new high. This suggests a decline in momentum, which usually goes hand in hand with a correction or consolidation.

The 23.6 percent Fibonacci retracement of the rally from $ 1,720 to $ 4,024 offers good support at $ 3,480.

However, if the recent high of $ 4,024 is broken, the all-time high of $ 4,366 can be tested. Then the focus of Ethereum traders shifts to the 123.6 percent Fibonacci extension of $ 4,567. Bloomberg even sees the ether at $ 5,000 – more on this in the article.

From Marco Oehrl

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Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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