Key Points
- Ethereum reaches a 22-week high in weekly fees due to the meme coin hype.
- The supply of Ethereum on exchanges has increased, raising concerns about a potential correction.
Ethereum’s Bullish Run
Ethereum’s [ETH] price has been on a bullish run, reaching $3,949. This brings it close to crossing the $4,000 mark. The second-largest cryptocurrency recorded a nearly 15% increase over the week. Traders have been excited by the surging prices, with daily trading volumes reaching multi-year highs of more than $20 billion.
The blockchain has also seen an increase in demand for its blockspace. Ethereum validators collected over $190 million in fees over the week, a 78% increase from the previous week. This is the highest fee collection since May 2022. Consequently, Ethereum’s annualized fee rate crossed over $10 billion for the first time since early 2022.
Meme Coin Hype and ETH Supply
The high network demand is largely due to the ongoing bull market for meme coins. Top Ethereum-based coins like Pepe [PEPE], Shiba Inu [SHIB], and Floki [FLOKI] have seen significant growth this week. The spike in fees has also led to more ETH being taken out of circulation, as a set amount of ETH is burned for each transaction. Over the week, more than 33K ETH were burned, pushing the annual deflation rate to 1.45%. This deflationary pressure could positively impact ETH’s long-term economic dynamics.
Ethereum’s rapid price gains have resulted in over 95% of the total supply being in profit. However, nearly 320,000 ETH coins were transferred to exchanges over the week, indicating that traders might be looking to profit in the coming days, potentially leading to a correction.
