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Tuesday, April 20, 2021

Ethereum: USD/ETH (ETH=) network congestion causing high transaction fees

Ethereum: USD/ETH (ETH=) network congestion causing high transaction fees

Ethereum Network congestion is observed on many days, and this can cause stratospherically high transaction charges. On some days, it can reach thirty dollars ($30).

The reason behind such an exorbitant fees spike is the increased competition for the ETH blocks. When distinct anomalous blocks are used, the transaction costs can increase for sending an ETH. Though the current fees hover around $0.10, the spike can occur randomly. What this represents is that there is still an inherent sense of competition for resources in the Ethereum network that is evident from the high traffic period.

DEFI and collectibles causes Ethereum Network congestion

High fees can be attributed to myriad other reasons as well as leading to a halt or difficulty in sending or receiving tokens. Regular users take the blunt during such periods. As per some experts, a prominent reason for this can be mining slowdown resulting from increasing difficulty due to the ice age feature of the mining. This means ice age isn’t coming anytime soon, and Ethereum production and subsequent block delays will be a regular feature.

ERC-271 token launch is also another reason. These collectible cryptos have caused Ethereum network congestion in the past as well. One more explanation behind fee surge is the abrupt increase in the smart contracts firing associated with the decentralized finance. When ETH prices fall suddenly, rules of liquidation were kicked in automatically along with various other price protection mechanisms related to crypto lending. Thus, these smart contracts were willingly paying high charges so that they can complete their activity.

Ethereum Network congestion is nothing new

The peak daily activity on the Ethereum network has reduced from its May 2019 height. From ninety-four percent (94%) in May 2019, the network’s present usage is around eighty-four percent (84%).

Similar network congestions were reported in 2018 and 2017 when the ICO craze was at its peak. Back in those days, regular transactions were delayed since the network was clogged with ICOs. Thus, high gas fees were natural. The FOMO factor is not applicable anymore, and the network has evolved to tackle the high fee situations accordingly.

Technical Indicators

Overall, the bias in prices is: Downwards.

Note: this chart shows extraordinary price action to the downside.

By the way, prices are vulnerable to a correction towards 176.15.

The projected upper bound is: 153.15.

The projected lower bound is: 115.57.

The projected closing price is: 134.36.


A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 20 white candles and 30 black candles for a net of 10 black candles.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 19.9086. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 45 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 21.18. This is where it usually bottoms. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 66 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -148.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 9 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX ETH= closed down -9.270 at 135.070. Volume was 50% below average (consolidating)(neutral) and Bollinger Bands were 56% wider than normal.

Open     High      Low     Close     Volume___
144.870 146.590 132.260 135.070 31,485
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 163.73 178.02 213.61
Volatility: 63 69 84
Volume: 49,181 51,473 66,381

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


FOREX ETH= is currently 36.8% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect moderate flows of volume out of ETH= (mildly bearish). Our trend forecasting oscillators are currently bearish on ETH= and have had this outlook for the last 5 periods. Our momentum oscillator is currently indicating that ETH= is currently in an oversold condition.

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