Ethereum gas reaches new low – What it means for ETH

• ETH’s daily active addresses and daily transactions have declined of late. 
• On-chain metrics gave hope for a price uptick in the coming days. 

Ethereum [ETH] has witnessed quite a few interesting developments over the last few days. At first glance, it seemed that network usage had increased, while the rest of the metrics suggested otherwise. Not only that, but ETH underwent a price correction as well. 

Read Ethereum’s [ETH] Price Prediction 2023-24

Looking at the bigger picture

Glassnode Alert’s 5 June tweet revealed that Ethereum’s mean gas price had reached a one-month low at press time. A lower gas price can lure new users onto the network and, in turn, increase the number of transactions. 

📉 #Ethereum $ETH Median Gas Price (7d MA) just reached a 1-month low of 33.801 GWEI

View metric:https://t.co/6QGDfZoULY pic.twitter.com/ddAtnVy8os

— glassnode alerts (@glassnodealerts) June 5, 2023

However, that has not been the case, as other datasets revealed that Ethereum’s key network stats have declined. For instance, Artemis’ data revealed that ETH’s number of daily transactions had declined since the end of May.

Additionally, after spiking on 2 June, ETH’s daily active addresses also waned. The blockchain’s TVL and DEX volumes also followed the same trend, which did not look good for the blockchain’s overall health. 

Ethereum has more challenges to tackle

Ethereum witnessed yet another price correction on 6 June. The correction caused ETH’s price to decline by nearly 3% in the last 24 hours. At press time, it was trading at $1,816.79, with a market capitalization of over $218 billion.

This happened after the Securities and Exchange Commission (SEC) sued Binance, one of the most prominent crypto exchanges.

Lookonchain’s data revealed an interesting whale transaction. As per the tweet, an ETH holder quickly dumped 10,265 ETH worth $19.1 million before the market crashed after the SEC sued Binance, with an average selling price of $1,861.

An #ETH withdrawer quickly dumped 10,265 $ETH ($19.1M) before the market crashed after the #SEC sued #Binance news reported, with an average selling price of $1,861.https://t.co/uKIGl8DmEr pic.twitter.com/7FBMfY2do7

— Lookonchain (@lookonchain) June 6, 2023

Will the declining trend continue?

CryptoQuant’s data gave hope for a trend reversal as a few on-chain metrics were positive. ETH’s exchange reserve was decreasing. A decline in the metric suggests that the token was not under selling pressure.

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Moreover, ETH’s taker buy/sell ratio was green, indicating that buying sentiment was dominant in the derivatives market. However, the recent price dip was accompanied by a surge in its trading volume, which could cause trouble over the coming days. 

Market sentiment around Ethereum remained unaffected 

However, Santiment’s data revealed that ETH’s price action made news in the community, as evident from the rise in its social volume. Still, most mentions seemed to have been positive, as ETH’s weighted sentiment shot up.