The spike in transaction volume has come with other noteworthy metrics, such as an increase in transaction fees. While higher fees can indicate network congestion and increased demand for block space, they also reflect the economic activity on the network. Investors and users should monitor these fees as they can affect the cost-effectiveness of conducting transactions on the Ethereum network.
Source: Over the past week, the network burned an average of 855,000 ETH per year, a mechanism that could contribute to deflationary pressure on the token’s supply over time. This “burn” counteracts the issuance of new , aiming to create a balance that can benefit the asset’s long-term valuation.
Looking at the daily chart, Ethereum’s price action appears . The price is maintaining a consistent pattern above both the 50-day and 200-day moving averages, indicating sustained buyer interest. The chart showcases a series of higher lows and higher highs — a classical uptrend signal. The recent price has surpassed local resistance levels, potentially aiming for higher price points.
The increase in on-chain activity, coupled with the reduction in supply due to the burn mechanism, are both fundamental factors that could be driving optimism in the market. The Layer 2 scaling solutions are also contributing to increased accessibility and efficiency, potentially drawing more users and transactions to the network.
This article was originally published on U.Today
Source: Cryptocurrency - investing.com
