Crypto Industry News:
Could high gas charges, in relation to the current Ethereum price, actually be a sign of potential gains?
Grayscale's research report "Valuing Ethereum" found Ethereum "is actually getting cheaper" in terms of price-to-sale ratio.
The price-to-sell (P / S) ratio is calculated by dividing the market capitalization of an asset by its sales revenue. In this case, dividing the 184 billion Ethereum market capitalization by the total transaction fee revenue yields a similar ratio. The lower the P / S ratio, the more attractive the investment (although there is some debate as to how this time signature can be applied to decentralized digital assets).
According to the Grayscale report, the Ethereum P / S ratio was the lowest in more than three years in early 2021 at around 0.02.
Although Ethereum is not a company and transaction fees are technically not income, institutional grade investment instruments such as those from Grayscale often use traditional analytical methods to help value assets. The report reads:
"A lower ratio indicates that the network is generating high revenues compared to ethereum's historic market capitalization and may therefore be undervalued."
It's worth remembering the tremendous effort put into lowering ETH fees with Eth2, Tier 2 Scaling, and EIP-1559 Ethereum. Either way, high transaction fees point to high demand online, which is good news for miners and hodlers. According to BitInfoCharts, the average Ethereum transaction fee has risen to a record high of around $ 23. This makes using the web completely unprofitable for smaller trades, eliminating the high DeFi activity for the average trader or investor.
Technical Market Outlook:
The ETH/USD pair has made a new all time high at the level of $1,693 and is currently consolidating the recent gains. The next target for bulls is seen at the level of $1,755 which is a 127% Fibonacci extension of the last wave up. The key technical support is located at the level of $1,414 (2017 high). The intraday support is located at $1,558. The momentum is strong and positive and the long term up trend is still intact and there is no indication of trend reversal or termination.
Weekly Pivot Points:
WR3 - $1,679
WR2 - $1,589
WR1 - $1,419
Weekly Pivot - $1,318
WS1 - $1,150
WS2 - $1,040
WS3 - $882
Trading Recommendations:
The up trend on the Ethereum continues and the next long term target for ETH/USD is seen at the level of $2,000, so any correction or local pull-back should be used to open the buy orders. Please notice, the up trend starting to go vertical, so the volatility will be higher than average. The bullish scenario is valid as long as the level of $830 is broken.
