It is safe to say the Ethereum network is in a state of disarray today. More specifically, the mean gas price has hit a four-month high that will be broken again soon. As the cost to transact increases, using the network becomes far more complicated.
Ethereum Mean Gas Price Record
It isn’t entirely surprising to see a new four-month high for the Ethereum mean gas price. As the network has become more congested in recent weeks, users have to pay higher fees to get transactions across. These high fees are beneficial to miners, but it creates a very annoying situation for everyone else. Solving this problem will not happen anytime soon either, leaving users frustrated.
According to Glassnode, the new four-month Ethereum mean gas price high sits at 212.583 GWEI. This figure is based on the seven-day moving average rather than daily prices. Today, sending an Ethereum transaction will cost more in gwei, but the numbers may go down during specific hours of the day.
What makes the situation so problematic is how this high mean gas price increases the cost to perform actions on the Ethereum network. It is no longer an exception to pay $40 or more to send Ethereum or ERC-20 tokens. An unsustainable situation is created, yet one that proves incredibly challenging. Ethereal is – for many – the network to build blockchain applications and services. With these fees, that isn’t possible.
According to ETHGasstation, the current standard gwei price is 271, with “asap” rates spiking to 314 gwei. If this trend continues, the gwei costs and the median gas price will keep spiraling out of control. For those looking to explore DEX trading or DeFi solutions, this situation poses many problems. It is no wonder other blockchains with similar services are gaining more traction.
Ethereum Exchange Outflow Rises
Despite the high median gas price, it seems Ethereum holders are intent on withdrawing vast amounts funds from exchanges. More specifically, the seven-day exchange outflow volume moving average has hit an all-time high. On average, over $43.1 million in Ether is withdrawn from exchanges. A substantial amount, but one that may not prevent the current market volatility from ending soon.
In this industry, it isn’t uncommon to see so much money being withdrawn from exchanges. A similar trend occurs with Bitcoin, creating a sense of a supply shortage. As Ethereum doesn’t have a maximum supply at this time, this exchange outflow volume appears to be a bit different. Negating selling pressure on exchanges will require far better numbers than these.
All of these statistics confirm Ethereum is in an intriguing position. Users seemingly prefer to withdraw ETH from exchanges despite the high costs. As exchanges do not always charge these fees in full, it will be interesting to see how they handle this aspect. Binance has suspended ETH and ERC-20 withdrawals twice in recent weeks, indicating the situation isn’t sustainable.