Key Points
- Ethereum’s recent upgrade has led to a surge in gas fees due to increased data inclusion in transactions.
- Ethereum’s price is currently testing resistance at $3,697 with a bullish outlook.
Following the recent Dencun upgrade of the Ethereum network, the ability to create blobs similar to Bitcoin inscriptions has been introduced.
This new feature allows for more data to be included in Ethereum transactions without affecting block processing times.
The Impact of Blobscriptions
However, the Ethereum network is facing a challenge with its blobs, or economical memory segments.
There is an issue with excessive text or image storage, known as “Blobscriptions”, with about 40% of blobs currently occupied by such inscriptions.
This has led to a significant increase in the gas fee on the Ethereum network.
According to data from Dune Analytics, a Crypto Intelligence firm, there has been a substantial growth in inscriptions built on Ethereum blobs.
Over March 27 and 28, a significant increase in inscriptions on Ethereum blobs was observed.
This activity is similar to the surge seen with Ordinals on the Bitcoin blockchain.
On Wednesday, nearly 40% of Ethereum blob submissions were for inscriptions.
Increased Transaction Fees
The increase in blob submissions has led to a rise in transaction fees on the Ethereum blockchain.
Transaction fees peaked at 586.26 Gwei on March 27, before declining to 25.18 Gwei by Thursday, as observed on Ultrasound.Money.
Ethereum Price Action
In recent weeks, Ethereum’s price has faced selling pressure, reaching lows around $3,000 before bouncing back.
As of now, ETH is trading at $3,583 with a market cap of $430 billion.
Currently, Ethereum is testing the resistance level at $3,697, which is the 38.2% Fibonacci placeholder derived from the decline between the March 11 peak of $4,093 and the March 18 low of $3,056.
The Relative Strength Index (RSI) shows sell signals in the overbought zone above 70, but the presence of green bars above the zero line in the Moving Average Convergence/Divergence (MACD) supports a bullish outlook for Ethereum.
It’s likely that Ethereum’s price will resume its upward trajectory towards the weekly resistance level and later to $4,093.92.
For Ethereum to sustain its rally towards the year-to-date (YTD) target, it’s crucial for the altcoin to convert the resistance level at $3,697 into support.
If there is a daily candlestick closure below the support level at $3,278, which corresponds to the 78.6% Fibonacci placeholder, it could potentially invalidate the bullish thesis.
In this case, the price of Ethereum might decline to test the March 18 low of $3,056.
