Earlier today, Bitcoin and the broader cryptocurrency market faced severe selling pressure amidst escalating geopolitical tensions and news of a conflict between Israel and Iran. However, the decline has once again sparked strong buying interest from investors. With Ethereum prices dropping to $2,877 earlier today, bulls have once again made a strong comeback towards $3,100.
Ethereum gas fees fall to three-month low
The latest data from on-chain analytics firm Santiment shows that transaction costs on the Ethereum network have dropped significantly. The cost of conducting a transaction on Ethereum has plummeted to $2.07, a significant drop from the $15.21 recorded during the period of increased demand on March 4.
Analysts at Santiment say that transaction fees on the Ethereum network often reflect the general sentiment of the cryptocurrency market. During extremely bullish periods, when people believe that the price of a crypto asset will rise significantly ("moonshot"), transaction fees tend to peak. Conversely, during pessimistic phases, when sentiment tends to believe that the cryptocurrency market is declining ("crypto is dead"), transaction fees often return to lower levels.
This pattern of transaction fees reflecting market sentiment underscores the cyclical nature of the cryptocurrency market. Peaks in transaction fees often coincide with Ethereum’s price tops, while periods of lower transaction costs occur near price bottoms.
On the other hand, Ethereum Layer-1 competitors like Solana have witnessed a massive surge in DeFi activity and the recent meme coin craze. This competition has also led to decongestion on the Ethereum network, keeping gas fees low.
Future ETH price trend
Ethereum once again attempted a recovery but encountered resistance around the $3,100 mark, reminiscent of Bitcoin’s struggles. Despite initially stabilizing above $3,000, bearish sentiment prevailed, pushing the price below this support level, briefly falling below $2,900. A bottom was established at $2,867 before the subsequent rebound.
Currently, Ethereum is recovering from its losses and has broken the 23.6% Fibonacci retracement level of the recent drop from $3,278 to $2,867. However, it continues to trade below $3,100 and the 100 hourly simple moving average (SMA).
The immediate hurdle for Ethereum is near $3,020, followed by a significant resistance area near $3,070, which coincides with the 100 hourly SMA and a key bearish trend line formed on the hourly chart of ETH/USD. Further resistance is expected near $3,120, which coincides with the 50% Fibonacci retracement level. A successful break above $3,120 could pave the way for a potential rise towards the $3,200 mark.
