Latest Ethereum Gas Fee Drop: Could This Help Spark a Bullish Momentum?
Ethereum prices are still declining because of its strong association with Bitcoin (BTC), even after gas limitations were raised on February 6 and gas prices were reduced by almost 90%. ETH gas prices fell 93% from the 30-day average of 13 Gwei to less than 1 Gwei on February 7. Gas prices are now nearly equal to those on the hugely popular Solana (SOL) blockchain due to their abrupt drop.
While Ethereum’s gas price is now about $0.05, Solana’s transaction fee is $0.04 at the time of writing. After validators decided to increase the gas limitations to about 32 million units, Ethereum achieved this milestone. Nearly half of the validators favored raising the gas restrictions, so this network upgrade was made without a hard fork. To put it briefly, raising gas limitations makes it possible to bundle more transactions into a block. This has led to a sharp decline in gas prices, which is a genuinely positive trend and may raise the price of Ethereum.
Ethereum Gas Fees Now on Par with Solana: A Catalyst for Price Reversal?
This circumstance is being touted by many as solving the scaling problem that Ethereum had for years. It is much more enticing because the gas prices are similar to those of the rival Solana. It might act as a catalyst, setting off a bottom formation and a positive reversal in the price of Ethereum.
Technically speaking, the price of Ethereum is getting close to the crucial support level of around $2,497, which is the middle of the daily wick that was created following the February 3 fall. Thus, there is a considerable chance of a reversal as ETH forms a bottom around $2,500. This perspective is supported by the Awesome Oscillator (AO) and Relative Strength Index (RSI), both of which show indications of reversal. After six months, the RSI has reached the oversold zone, and AO is displaying green histograms below the mean level, indicating that the bearish momentum has diminished and that the bullish momentum may be returning.
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