Ethereum: Rising gas fees impact not just the real world, but Web3 as well

• Rising gas prices could affect Ethereum(ETH).
• NFT trades decline, but traders show optimism.

As the ETH network expands, new data reveals an alarming trend. Since the network’s recent merger, gas fees on the Ethereum network have steadily increased.  This increase in gas prices may stymie Ethereum’s adoption by making the network inaccessible to users who cannot afford the fees.

The rising cost of gas has had a direct impact on the number of active Ethereum addresses. As transaction costs rise, fewer users may be willing or able to participate in the network, resulting in a decrease in active addresses. 

The NFT market gets affected

The cost of transactions varies depending on the type of transaction, with Ethereum NFT transactions having the highest gas prices. This has contributed to a drop in interest in Ethereum NFTs, as the cost of creating and trading these digital assets has risen.

Despite the challenges posed by rising gas fees, the Ethereum network is showing signs of life. One of these is an increase in the velocity of ETH, which indicates that the frequency with which ETH is traded between addresses has increased. 

Traders turn positive

Furthermore, as long positions on the network increased, traders became more optimistic about Ethereum.  over 52% of all Ethereum positions were long. This indicated that traders expected the price of ETH to rise further.  This rising optimism, combined with lower sell pressure, may contribute to a more stable Ethereum market in the future. Overall, rising gas prices on the Ethereum network are causing concern among holders. While rising costs may limit network adoption, there are also signs of increasing optimism and stability in the network. Only time will tell whether these encouraging signs outweigh the challenges posed by rising gas prices.

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