Ethereum

2024

DeFi

when

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Ethereum (ETH) has seen a significant increase in its on-chain transaction fees. Ethereum’s gas fees have flipped a level last seen in April 2024. As per a <a href="https://x.com/intotheblock/status/1867536975957569839" rel="noopener noreferrer nofollow">post</a> by IntoTheBlock on X, DeFi activity is responsible for this significant <a href="https://u.today/why-ethereum-fees-are-skyrocketing-details" rel="noopener noreferrer nofollow">spike in gas fees</a>.
<h2 id="key-drivers-behind-ethereum-fee-increase">Key drivers behind Ethereum fee increase</h2>
Ethereum’s weekly gas fees reached $67 million, representing a 17.9% increase. Despite the spike, this signals increased activity on the Ethereum blockchain. The update attributes this to an uptick in usage among decentralized finance platforms.
Additionally, most altcoins experienced a huge drop in price when Bitcoin (BTC) dropped below the historic milestone of $100,000. However, with BTC rebounding just before the week’s trading session slows, some altcoins are rebalancing in the broader cryptocurrency market.
<blockquote class="twitter-tweet">
 Weekly Ethereum fees hit their highest levels since April, driven by significant DeFi activity and rebalancing in response to this week's $100K market retracement. <a href="https://t.co/OX8bFLHS1r" rel="noopener noreferrer nofollow">pic.twitter.com/OX8bFLHS1r</a>— IntoTheBlock (@intotheblock) <a href="https://twitter.com/intotheblock/status/1867536975957569839?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">December 13, 2024</a>
</blockquote>
This development has led traders and institutional investors to adjust their portfolios and contribute to the fee surge.
Meanwhile, ETH’s price only increased slightly by 0.7%. This suggests that market participants remain cautiously hopeful despite the price retracement and increased activity levels.
As of this writing, ETH is<a href="https://coinmarketcap.com/currencies/ethereum/" rel="noopener noreferrer nofollow">trading</a>at $3,919.47, down by 1.42%. Nevertheless, many expect<a href="https://u.today/ethereum-eth-resumes-its-4000-price-journey" rel="noopener noreferrer nofollow">Ethereum</a> to resume its journey to the $4,000 price level, like Bitcoin.
<h2 id="high-fees-amid-profit-opportunities">High fees amid profit opportunities</h2>
Another notable indicator from the post is the decrease in exchange flows. Ethereum’s exchange flow plunged by $778 million, reflecting the net outflows from trading platforms. This might show that some investors withdrew ETH to personal wallets. If so, it signals long-term confidence in Ethereum’s future price potential.
However, net flows increased by $42 million compared with the previous metric. This slight increase was triggered by short-term selling pressure or traders and investors reacting to market volatility.
Despite the market retracement, activity on Ethereum remains positive, as shown by the <a href="https://u.today/ethereums-vitalik-buterin-indicates-new-ways-to-solve-l1l2-fees-issues" rel="noopener noreferrer nofollow">high gas fees</a> and movement of funds. This indicates that these traders have decided to shun the high transaction costs and focus on the profit-taking that the market presents. <a href="https://u.today/ethereum-gas-fee-back-to-historic-high-detail" rel="noopener noreferrer nofollow">Read original article on U.Today</a>

Ethereum Gas Fee Back to Historic High: Detail

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