Ethereum Falls Below $2,500 Leading to A High Gas Fee

• Ethereum gas fees surged to 710 gwei as the price dropped to $2,357, highlighting increased network activity.
• If Ethereum’s price drops to $1,950, DeFi protocols could face $92.2 million in liquidations.
• Top meme coins outperformed Ethereum despite significant losses, showcasing their relative volatility.

On August 5th, Ethereum experienced a significant gas fee surge as its price fell to nearly $2,100. Notably, the maximum gas fee skyrocketed to 710 gwei, representing a dramatic increase compared to previous days. During this period, the average gas fee stood at 350 gwei. As the network faced heightened activity, the minimum gas fee also saw fluctuations, with the lowest recorded at 3 gwei.

If Ethereum’s price declined further, the DeFi ecosystem could face potential liquidations. If the price dipped to $1,950 level, it could trigger $92.2 million in liquidations within DeFi protocols. A steeper drop to $1,790 could result in $271 million in liquidations. These potential liquidations could also contribute to increased network activity, leading to higher gas fees.

In the same 24-hour period, top meme coins by market cap outperformed Ethereum. Despite Ethereum’s sharp decline, meme coins like Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) faced significant losses but still managed to outperform Ethereum. For instance, Dogecoin, with a market cap of $13.35 billion, declined by 15.47% in the past 24 hours. Shiba Inu and Pepe experienced declines of 14.57% and 17.90%, respectively. These figures underscore the volatility and relative performance of meme coins compared to Ethereum .

As of press time, Ethereum stood at $2,357, marking a 20.28% drop in the last 24 hours. The price trend shows a continuous decline from a high of approximately $2,917. This sharp decline and lack of significant recovery within the observed period reflect the volatile nature of the cryptocurrency market. 

Ethereum’s recent price drop and subsequent gas fee surge have significant implications for the DeFi ecosystem. At the same time, meme coins have shown resilience, outperforming Ethereum despite facing their own losses. These developments highlight the dynamic and interconnected nature of the cryptocurrency market, where price movements, network activity, and asset performance are closely linked.