ETHGas [GWEI], which tracks Ethereum [ETH] gas fees, rose over 36% after a recent decline. ETH also rebounded slowly, trading near $1,905.
The rally lifted GWEI’s weekly gains above 60%, outperforming Bitcoin [BTC] and the broader crypto market.
Daily trading volume rose over 308%, reaching $30.72 million at press time. Speculative interest around the Ethereum ecosystem appeared to drive the surge.
Why is ETHGas price rising?
Ethereum gas fees rose over the past week, signaling increased network activity and possible congestion. Transaction data pointed to a similar rebound.
As per Etherscan, the number of transactions in August was between 3,094 and 6,186. This resulted in the price of ETHGas going up as it tracks the cost of transactions.
Among the drivers of this surge in activity was Ethereum’s lending ecosystem. The ecosystem’s DeFi lending dominance has quietly risen to 67% of all onchain borrowing. It was closely followed by Base Chain, which also contributes to Ethereum fees.
Layer 2 (L2) solutions like Arbitrum One [ARB], Optimism [OP], among others, contributed to this spike in activity in the Ethereum ecosystem.
Altogether, ETH and its liquid staking tokens backed more than two-thirds or all DeFi loans. As activity rebounds, the price of ETHGas follows, but how high can it go?
Can GWEI price surpass the $0.028 resistance level?
The Bollinger Bands (BB) showed that the token was seeing a lot of volatility after contraction in the first few days of August. The BBs had opened up as the price pushed toward the resistance level at $0.028.
Similarly, the Net Volume indicated buyers dominated sellers. Over 21.8 million were bought on Binance’s perpetual futures market, reinforced by the Long/Short Ratio for accounts, which was at 1.91.
This suggested continuation of more buying activity. This market had been buying since hitting an all-time low (ATL) of $0.01441 on July 30.
However, this renewed network activity faced a resistance at the $0.028 level. The target remained feasible unless GWEI broke and held below $0.01983.
Even so, for such a trend to continue, the network’s congestion needs to stay. Otherwise, the price of GWEI may revert back to its downtrend.
Final Summary
- ETHGas rallied over 36% as activity on the Ethereum network rebounded, especially its share of all DeFi loans.
- GWEI broke above a resistance at $0.01983 as price movement became more volatile with increasing buying activity.
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