Record Drop in Ethereum Gas Fees Marks Historically Bullish Signal For ETH, Analyst Says
Ethereum's gas fees drop 95%, signaling a potential bullish trend for ETH, says analyst Ryan Lee, citing historical data and network upgrades.
Ethereum's gas fees experienced a significant drop earlier this week, reaching a five-year low. Analyst Ryan Lee from Bitget Research suggests that this drop could be a bullish signal for ETH prices, citing historical data that shows a correlation between low gas fees and subsequent price increases for ETH.
Lee points out that the migration to other blockchains like Solana and Layer 2, along with the Dencun upgrade, has contributed to this decrease in gas fees. These factors have made the Ethereum network more efficient, which in turn has led to a reduction in the necessary transaction fees on the network.
Additionally, the lower gas fees have resulted in a decrease in the amount of ETH being burned, causing the token's supply to increase. Data indicates that nearly 16,000 ETH, worth approximately $42 million, was added to the total supply over the past week, putting the supply on track to grow by 0.7% this year.