Ethereum (ETH) Gas Fees Hit Five-Year Lows, Here's What It Means for the Price

Amid this ongoing market downturn, recently Ethereum (ETH) is gaining significant attention from the crypto community.

As the broader market downturn continues, Ethereum (ETH) has managed to capture the attention of the crypto community. On August 19, 2024, on-chain security analytic firm Kaiko shared an update on X (previously Twitter), highlighting that Ethereum's gas fees have reached a five-year low.

This record-breaking decline in gas fees, as per Kaiko, will result in less ETH being burned, ultimately leading to a faster increase in its supply. Notably, data shows that ETH's total supply has been steadily increasing since April 2024, while its price has consistently dropped during this period.

Following the approval of the spot Ethereum Exchange Traded Fund (ETF) in the U.S., demand for ETH has surged from investors and ETF issuers. Despite this strong demand, the increasing supply raises the possibility of ETH facing massive selling pressure, potentially causing a sharp decline in its price over the coming days.

Amid this record low, Bitget Research's chief analyst, Ryan Lee, stated, “Every time ETH gas fees drop to rock bottom has often signaled a price bottom in the mid-term.”

Analyzing ETH's price from a technical perspective,ксперты believe that the cryptocurrency is displaying bearish signs as it trades below the 200 Exponential Moving Average (EMA) on a daily time frame. In addition to the 200 EMA, ETH has already broken out of a bearish rising wedge price action pattern on a daily time frame. Simultaneously, ETH is also forming a bearish head-and-shoulder price action pattern, which further adds to the bearish outlook.

If ETH closes a daily candle below the $2,520 level, it could potentially drop to the $2,300 level or even lower in the coming days.

At press time, ETH is trading around the $2,590 level, having experienced a price decline of over 3% in the last 24 hours. Meanwhile, its trading volume has seen an increase of 30% during the same period, indicating higher participation from investors and traders amid the market downturn.

On the other hand, ETH's open interest has remained largely unchanged in the last 24 hours, suggesting a neutral interest from traders in the cryptocurrency.

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