Recent Ethereum price action and net exchange outflows spurred the rise in fee prices.
Ethereum (ETH) price continues to scale higher extending the gains of January. However, the price is hovering in a narrow range since late January, facing the resistance hurdle near $1,671. Along with the overall risk sentiment, the Ethereum Zhejiang testnet and Shanghai upgrade added to the bullish sentiment of the second-largest cryptocurrency.
Ethereum appreciated more than 45% year-to-date. However, there have been some warning signals that should not be ignored. Ethereum’s network weekly median price of Gas reached the maximum point in the past six months. Further, the Ethereum network’s address count increased with both non-zero addresses and the number of wallets that staked ETH on the Beacon chain hit record highs.
With the rising gas fees ETH price graph has become stable below $1,700. The demand for the altcoin has been impacted by the slowdown in the price upside movement.
Reason for fee prices increasing
Higher network demand induces congestion with the higher demand for ETH and tokens used to pay the gas price. ETH’s recent price action hints at the formation of resistance near $1,700
On the daily technical chart, it can be seen the price hit a critical resistance zone. Both network growth and transaction counts have been on a continuous rise in the last four weeks. However, for the past four days, the activity dropped to its lowest monthly levels.
Despite the above arguments, the underlying sentiment remains bullish for ETH. Ahead of Ethereum’s Shanghai upgrade where staked ETH tokens will be unlocked. This will add up to the number of addresses holding Ethereum.
