Ethereum revenue in September after the Fed rate cut was about four times that of Solana. Ethereum’s annual inflation rate rose to 0.74%, the highest level in two years. Ethereum has regained the support level at $2,395 and could rise to $2,595 if it breaks above the 100-day SMA.
Ethereum (ETH) rose more than 3% on Friday, with recent reports pointing to on-chain revenue growth in September as ETH’s annual inflation rate rises to a two-year high.
Ethereum monthly revenue growth begins to recover despite rising issuance rate
Swiss crypto bank Signum noted in a report on Thursday that Ethereum’s revenue increased in September, outpacing Solana’s revenue by more than three to four times.
The top Total Value Locked (TVL) blockchain has seen a steady decline in its revenue share since the Dencun upgrade in March, which “led to some cannibalization of Ethereum by Layer 2.”
Ethereum revenue has hit multi-year lows due to a drop in on-chain activity following the market crash in August. Earnings began to rise again after the US Federal Reserve (Fed) cut interest rates by 50 basis points, according to DeFirama data.
Ethereum revenue (Source: DefiLlama)
Signum notes that L2 could benefit Ethereum in the long term if market activity continues to pick up.
“Layer 2 protocols can divert business away from the Ethereum blockchain, but these cheap, scalable networks also enable activities that were previously not economically viable. It is hoped that this will lead to transactions as the need to resolve the issue will also increase revenues in the long run,” the bank concluded.
Ethereum co-founder Vitalik Buterin has previously made a similar argument, saying that Layer 1 can compensate for lower fees through massive scalability over time.
However, investors may be concerned in the short term as Ethereum’s inflation rate has increased to 0.74%, according to Binance Research’s October 2024 Monthly Market Insights Report. Analysts at Binance believe that ETH issuance is at a two-year high as market share shifts to L2 and gas fees decline due to lower on-chain activity, resulting in a slower burn rate of ETH. He pointed out that it was on par.
ETH supply/daily issuance (Source: Binance Research)
Meanwhile, the Ethereum ETF recorded $3.2 million in outflows on Thursday, according to data from Pharcyde Investors.
Ethereum Could Rise to $2,595 After Recovering Key Support Level
Ethereum was trading around $2,430 on Friday, up 3% on the day. According to data from Coinglass, there was $20.9 million in liquidations on ETH in the past 24 hours, with long and short liquidations accounting for $9.04 million and $11.86 million, respectively.
On the 4-hour chart, ETH has regained the $2,395 level after finding support near the major downtrend line. According to IntoTheBlock data, that price may have been defended by investors who bought 52.3 million ETH near the $2,316 to $2,385 region, the area of highest demand.
ETH/USDT 4 hour chart
If ETH continues its bullish move and breaks above the 100-day simple moving average (SMA), ETH could rise to $2,595.
The Relative Strength Index (RSI) is approaching neutral levels and the Stochastic Oscillator (Stoch) is trending towards oversold territory.
This theory is invalidated if the daily candlestick closes below $2,395.
Frequently asked questions about Ethereum
Ethereum is a decentralized open-source blockchain with smart contract capabilities. Its native currency, Ether (ETH), is the second largest cryptocurrency by market capitalization and number one among altcoins. The Ethereum network is tailored for building cryptographic solutions such as decentralized finance (DeFi), GameFi, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).
Ethereum is a public decentralized blockchain technology that allows developers to build and deploy functional applications without the need for a central authority. To facilitate this, the network leverages the Solidity programming language and the Ethereum virtual machine, allowing developers to create and launch applications with smart contract functionality.
A smart contract is a publicly verifiable piece of code that automates an agreement between two or more parties. Essentially, these codes self-execute the coded actions if a given condition is met.
Staking is the process of earning revenue from idle crypto assets by locking them in a cryptographic protocol for a specified period of time as a means of contributing to security. Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism on September 15, 2022 in an event dubbed “Merge”. This merger was an important part of Ethereum’s roadmap to achieve high levels of scalability, decentralization, and security while maintaining sustainability. Unlike PoW, which requires the use of expensive hardware, PoS reduces the barrier to entry for validators by leveraging the use of cryptographic tokens as the core foundation of the consensus process.
Gas is a unit that measures the transaction fees users pay to conduct transactions on Ethereum. When the network is congested, gas can be very high and validators may prioritize transactions based on fees.
