Ethereum just vaulted by +11% to start the month, breaking above the $3.8k mark for the first time since May 8th.

However, Ethereum's price rally is also accompanied by a massive uptick in average transaction fees, which are hovering at 44(!) USD at the time of writing:

In terms of average trx fees, this makes September 1st the fifth busiest day in the history of the network.

In such conditions, it's not a surprise that the amount of daily addresses interacting with ETH currently sits at 515k, down -35.5% compared to the last time that ETH was at $3.8k:

With exorbitant fees pricing out low-ROI transactions, Ethereum's network activity will likely suffer in the short-term.

Which begs the question - will ETH be able to chart a new price all-time high with sub-optimal fundamentals? This especially as similar spikes in trx fees coincided with short-term price corrections in the past.

Watch this space.

References:

• Snowden - https://twitter.com/nntaleb/status/1423027349822509062
• Moons, snapshot, karma - https://www.reddit.com/r/CryptoCurrency/comments/oy4cjh/new_moons_distribution_round_16_proposal/
• ETH, London - https://thedefiant.io/eip-1559-economics/

Note that G should be F'

$ETH Price Target 24/09/2021 USD 3300

Looking at the recent price action between 12th May and 26th June and overlaying this on price performance from 20th Feb to 28th Feb I target a double bounce off USD 2000 for $ETH in July before commencing a trend up to USD 3300 by mid/end September.

Likely there will be a consolidation:

$ETH Price Target 24/10/2021 USD 2700

Followed by a further trend upwards towards the end of 2021

For the many who presumed that sub-$2,000 Ethereum could never be a thing again as prices were soaring about $4,000 just six weeks ago, it's been a wild ride. Here's how things look now:

Bullish Signs

MVRV (30-day)

Historically, an average MVRV (30d) of -16.9% implies a less risky opportunity to buy than normal.

Weighted Social Sentiment (Twitter)

The crowd sentiment toward Ethereum is historically low now, a great potential opportunity to buy against the masses.

Average Fees

ETH fees are at their lowest point since December, 2020, clearly allowing more flexibility for users to move assets.

Neutral Signs

Active Addresses vs. Deposits

There was a pretty large uptick in active deposits a few days ago, but more or less, non-active addresses vs. active deposits are about even with one another, historically.

Bearish Signs

Supply on Exchanges

Supply has moved back to exchanges considerably since May's all-time high.

NVT

Token circulation has dried up heavily compared to market cap.

In case you missed it, the average fee to interact with the Ethereum blockchain dropped to $3.14 yesterday, marking a 6-month low for the network:

And yet, despite the fee 'discount', the amount of daily ETH addresses continues to decline (shrinking by -30.5% in the past month):

As is the amount of unique ETH moving on the network daily, which recently dropped to a 6-month low 607k:

If you needed any more proof of just how fearful the market is at the moment (and that some holders have likely retreated completely for the time being), this should do the trick.

The best leading fundamental metrics Santiment has to offer are making compelling cases for where Ethereum is heading next. Despite the retrace this week, crypto's 2nd largest asset is still +570% in the last 6 months. It's time we dig into whether things can continue, or we're finally cooling off:

Bullish Signs

NVT

Our NVT model shows we're back in green territory, with plenty of token circulation happening at this market cap.

Supply on Exchanges

Ethereum's supply on exchanges continues moving down.

Neutral Signs

Active Addresses vs. Deposits

Active addresses and active deposits are pretty much both staying in unison, with a slightly concerning slide happening.

Average Fees

Average fees have come back to earth, but remain high compared to where they were at the turn of the year.

Bearish Signs

MVRV

MVRV is still abnormally high, as average trader returns need to cool down to reduce risk of entering at this position.

Weighted Sentiment

Weighted social sentiment continues indicating positivity from the crowd.

The BitMEX Perpetual Contract Funding Rate is an important way to gauge whether the crowd on one of crypto's top exchanges, is getting overly greedy or fearful.

The metric is defined on our Santiment Academy as a fee paid by one side of the perpetual contract to the other. When the funding rate is positive, Longs pay Shorts. When the funding rate is negative, Shorts pay Longs.

So in essence, as traders, we're looking for high funding rates (greed) to be indicative of a potential upcoming top, and low funding rates to indicate a potential bottom (fear).

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