Large Scale Air-Drops Congesting Ethereum and Spiking Transaction Fees
The vibes surrounding crypto prices seems is no doubt positive. More so after weekend’s price boosting events jolting bulls back into position of command-at least from what’s we’re seeing at the daily chart. Like many coins, Ethereum (ETH) is following the same path and is up seven percent in the last day and four percent for the week. Now, the question is: would buyers continue maintaining this momentum?
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It’s no doubt that during blockchain platform carry with it different advantages. On one hand we have super-fast and scalable and on the other, secure but slow. Ethereum is the latter and but regardless of its slow throughput, it’s a go to platform for developers and start-ups seeking for funds. EOS and Tron are some of the more successful projects which sprung into live from Ethereum. Funny enough, both projects plan on dislodging Ethereum as the king of Smart Contracts.
Now, if there is a hitch that needs to be solved is the issue around network congestion. It always has been because of the inherently low through-put and the technically inefficient consensus algorithm. Here, every node has a copy of all the network transaction. Loom and Network shards could be potential solutions but are not yet out of testing.
Inefficiency and demand definitely don’t go hand in hand and due to this simple combination, we are seeing transaction fees on the Ethereum network spiking 7,000 percent. This is due to the increasing number of large Air drops or token issuance by start-ups. In recent times, it has been a race of some sorts.
This is causing processing inconsistencies and more often than not, miners cannot pick and process transactions even if they fall in between the ball park 40Gwei and 80Gwei. It even got worse in Binance because at one point they increased transaction fees for all outgoing transactions to 180Gwei.
Ethereum (ETH) Technical Analysis
In the last week, Ethereum (ETH) is hinting of attempts of shaking off sellers and is up four percent. This shift of momentum can’t be clearer than in the weekly chart. Here, not only are we seeing prices reacting at around key support lines and this year’s lows. April high lows are of course definitive, anchoring our analysis.
In the chart, $400 is our main support line and while Ethereum seems to be recovering in face of strong bears, should this week end up bullish then we shall have a classic three bar reversal pattern, the Evening Star right around the support. Check out last week’s pin bar with long lower wick.
Now, here’s a thing with ETH prices: Yes, there are buyers stepping after that solid foundation over the weekend. But, to be clear. Bulls would only be in charge right after they print above $500-our immediate resistance and buy trigger line. While risk-on Ethereum traders can begin ramping up with tight stops at $440, conservatives should pause their trades until our trade conditions are met. Overly, targets are at $850.
Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.