Here’s Why ETH May Hold $3,000

Ethereum (ETH), the second-largest crypto, has had lucrative sessions since the start of this year. The altcoin’s positivity last week witnessed Ethereum registering a breakout over the $3,300 levels. However, the leading alternative asset faced rejections two times around these price zones.

While writing this content, Ethereum trades around $3,081 after losing 2.65% over the past 24 hours. However, ETH fundamentals show that the currency might not extend its losses below the $3,000 mark. Santiment, an on-chain analyst, ETH network has surged to a 1-month high. Ethereum network has seen increased activity this month. The ecosystem saw increased new addresses.

On the other part, August and July have relentlessly witnessed ETH exchange outflows. Glassnode data shows that the exchange outflows persisted during the NFT and ETH price rebound craze. However, the exchange flows seem unshaken with the EIP-1559 update.

ETH London Update Boost Network Capacity

The London update earlier this month saw ETH network capacity growing day by day. After the EIP-1559 launch on 5 August, the Ethereum network had its daily gas usage increasing by nearly 9%.

Keep in mind that the daily gas usages depict the total network capacity. The recent price movements saw this value surging to more than 100 billion from 92 billion. That is a notable change on the ETH platform since the 17% increase on 21 April. Ethereum founder Vitalik Buterin highlighted some of the reasons behind Ethereum recent outlook using the Reddit platform. They are:

  • The London upgrade delayed ETH Ice Age, making the PoW algorithm more complex. That increased block times. That explained the 3% change in block speed, accounting for a 3% out of 9% surge in gas usage.
  • Before the London hard fork, the network had unutilized block space as 15 million was the gas use limit. Now, after the update, that value switched from a limit to a target.
  • Also, the ETH co-founder highlighted that 1559 is imperfect as far as the 15% burning base fee is concerned. Buterin wrote that users might enjoy the unintended 6% surged ETH capacity resulted from the London upgrade.

For now, ETH has a higher probability of holding the $3,000 mark.

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