Ethereum (ETH) saw a significant uptick in network fees this past week, rising nearly 60% as investors returned from the holiday season. The increase in network fees, alongside a surge in stablecoin market capitalization, suggests a potential recovery for ETH, which is currently trading around $3,420—a 3% gain on Friday.
Ethereum’s stablecoin market capitalization reached an 18-month peak of $83.31 billion on Thursday. This surge follows a pattern observed previously when stablecoin market cap growth contributed to Ethereum’s price reaching a yearly high of $4,093 in March.
Network Activity and Market Movements
The increase in network fees indicates heightened activity on the Ethereum network, which could positively impact the cryptocurrency’s price. However, Ethereum ETFs experienced their second consecutive day of negative flows on Thursday, with Grayscale’s ETHE seeing $20.1 million in outflows, dragging the entire category into negative territory. This trend is partly attributed to the typical Q3 crypto market lull exacerbated by the summer holiday season.
Technical Analysis and Price Projections
ETH is currently working to sustain a breakout above a falling wedge pattern, which could potentially drive the price to $3,366 if the trend continues. The falling wedge is defined by an upper trendline from July 30 and a lower trendline from August 7.
Resistance levels include the 100-day and 200-day Simple Moving Averages (SMAs), which could hinder upward movement. The Relative Strength Index (RSI) is climbing and approaching overbought territory, while the Stochastic Oscillator (Stoch) has already entered the overbought region, signaling a possible brief price correction.
If ETH drops to $2,335, it could trigger the liquidation of over $45.7 million worth of futures positions, according to Coinglass data. Despite the bullish signals, caution is warranted as the market adjusts to recent movements and potential corrections.
