The amount of ETH held in self-custody has reached an all-time high, signaling a solid confidence level among Ethereum investors. The recent surge in Ethereum in self-custody is a significant milestone for cryptocurrency. The amount of Ethereum held outside of exchanges has reached an all-time high, with only a small portion (10.31%) remaining on exchanges.
This trend highlights a strong confidence level and a shift towards long-term investment strategies among Ethereum holders. In this Ethereum price prediction, we will delve into the implications of this milestone and explore the potential impact on Ethereum’s price.
Ethereum Transaction Fees Return to Normal Levels Following 69% Decline
In May, transaction fees on the Ethereum network experienced a significant surge, reaching a one-year high of over $10. However, recent data from Santiment, a popular market intelligence platform, reveals that fees on the Ethereum network have now stabilized below $5.
On the final day of May, Santiment’s data showed that Ethereum fees, which had peaked at around $14 per ETH transaction in the early days of the month, have now decreased to $4.28 per transaction, marking a 69% decline in fees.
#Ethereum is now being held in self custody and away from exchanges at the highest level since the week the token was introduced nearly 8 years ago. This essential all-time low ratio of $ETH on exchanges (10.31%) indicates confidence from #hodlers. https://t.co/VPwlCjzbAN pic.twitter.com/VB2r57xhQl
— Santiment (@santimentfeed) March 27, 2023
Interestingly, the surge in fees during early May was primarily attributed to the frenzy surrounding the PEPE token, a meme-coin that gained significant investor attention shortly after its launch. This sudden surge in popularity led to inflated transaction costs for users on the Ethereum Network.
Ethereum co-founder Vitalik Buterin highlighted this issue, cautioning against overloading the network consensus. He emphasized the importance of maintaining the network’s security and warned that overloading it could pose high systemic risks.
However, the latest data indicates that rising fees have subsided, with fees returning to their normal levels. The 69% decline in fees over a span of 25 days demonstrates users’ commitment to the network and reflects increased adoption as the secure ecosystem becomes more affordable. Consequently, ETH experiences growth in response to this increased utility and activity on the network. Lower transaction fees also provide added incentives for existing users.
As fees decline, users are once again drawn to the Ethereum network for various applications, including Non-Fungible Tokens (NFTs), Decentralized Finance (DeFi), and smart contracts, among others.
Self-Custody Trend Surges Among ETH Holders, Reducing Dependency on Third Parties
Another factor driving the increase in ETH value is the decreasing percentage of ETH supply held on crypto exchanges. Data from Santiment shows that the supply rate of Ethereum on crypto exchanges has reached an all-time low of 10.31%.
This decline is driven by a shift in preference among ETH holders regarding the custody of their coins. Due to increased concerns about the security of centralized exchanges, people have started preferring the self-custody of their tokens instead of trusting them with crypto exchanges. Additionally, the market is also facing uncertainty regarding the classification of ETH as a security or commodity by the SEC, which has added to the concerns of ETH holders.
#Ethereum‘s average fees have come back down to earth after its 2023-high $14 per $ETH transaction in early May. More affordability encourages more utility. Additionally, #crypto‘s #2 asset is at an #alltimelow 9.9% on exchanges as #selfcustody reigns. https://t.co/fXixRfgRdY pic.twitter.com/nj2p1UAMqU
— Santiment (@santimentfeed) May 31, 2023
The act of holding assets in personal accounts or secure wallets rather than trusting them with third-party exchanges is known as self-custody. The increasing number of ETH holders opting for self-custody indicates their confidence in the cryptocurrency and their desire to retain control of their assets. This feature aligns with the decentralization ethos and enhances Ethereum’s reputation as a reliable and secure platform for smart contracts and value transfer.
Lower transaction fees, combined with the rise in self-custody, highlight the resilience and maturity of the Ethereum blockchain network. These advancements increase the trust of current users and attract new users to the Ethereum ecosystem.
Ethereum Price Prediction
Taking a technical analysis approach, Ethereum is currently showing bullish momentum as it has rebounded from a significant support level near the 50% Fibonacci retracement level, providing support around the $1,843 level.
On the four-hour timeframe, three bullish candlesticks, known as “three white soldiers” in technical terms, have formed, indicating a strong uptrend. Furthermore, Ethereum has already surpassed the resistance level of $1,888.
In terms of upside potential, the successful breakout above the $1,888 level could potentially drive Ethereum toward the next resistance level in $1,927.
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