Ethereum fees fall 70% - will this cause a surge in activity?

Ethereum [ETH] has been lagging behind its peers for over a year now. But new data on the blockchain indicates a possible turnaround: while ETH is down 1.1% year-to-date, bitcoin [BTC] and solans [SOL] are showing significant growth.

Two important developments: lower transaction fees and faster accumulation, Could this signal the beginning of an #Ethereum renaissance? This week, transaction fees on Ethereum dropped more than 70%, bringing the total daily fees to $7.5 million, down from $23 million a few weeks ago. This was less than The decline came after the recent increase in the gas cap, which effectively increases block throughput and reduces congestion. Historically, fee reductions correlate with increased network utilization. For example, during previous fee cuts in 2021 and mid-2023, the number of active addresses and transactions per day increased dramatically. If this trend continues, Ethereum could see an increase in activity on the blockchain again. The big question, however, is whether this increase in activity will lead to sustained demand rather than a short-term speculative surge. Does the sharp drop in #ETH exchange inventories signal a decline in supply? Ethereum exchange inventories have fallen from 19.7 million ETH in early January to just 10 million ETH. Such a sharp drop is a sign that investors are moving assets to self-sufficiency and reducing supply to sell. Historically, such sharp drops have often preceded price increases. The last such stock drop occurred in Q4 2023, followed by a 35% price increase over the next two months. If this price trend continues, Ethereum could face a supply shortage. Especially if demand recovers amid lower fees. despite the blockchain's improved performance, Ethereum was down 1.1% year-over-year at the time of publication. It lags behind #Bitcoin (89.6%) and Solan (68.7%). the latest data also points to strong resistance around $2,800, above which ETH has been unable to break through despite growing accumulation. The RSI index is at 39.

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