- Ethereum has recovered to a 600,000 transaction volume a day
- This comes after transaction volume had slumped to 434,000
The Ethereum network recently experienced a drop to a 24-hour volume of 434,000 transactions. However, it seems to have rebounded from that low point with its current transaction volume being 600,000.
This sees the coin returning to its September high where it traded for about $300 per ETH. Since then, the transaction volume of the Ethereum network has formed a significant ‘V’ shape.
With the year of the bear 2018 drawing to an end, the relative trading and transaction volumes of the large cap coins are among the many factors experts in the space are keeping a close eye on to determine which projects have the best prospects going forwards.
What caused the recovery?
There are a number of factors that contribute towards a currency’s value and trading volume fluctuating. In this case, the likely reason is that with Ethereum currently running at about 50 percent capacity, transaction fees are at their lowest point for the entire year; less than a cent.
It has been recorded that over 600,000 transactions have been made during each of the last two days alone. A reduction in transaction fees will certainly encourage increased activity due to investors wanting to take advantage of the situation.
Another factor that can be considered is the price of ETH. Traditionally, the cheaper an asset is, the more transactions there will be associated with that asset.
Token price not following suite
However, in the cryptocurrency world, it isn’t always that simple. From previous observation, it is assumed that price and transactions move concurrently. Recent charts, however, do not show similar movements. While there was a ‘V’ spike in transactions, there was no similar recovery in terms of the token price.
Price per Ether token did experience a low of $167 back in mid-September and has recovered a little bit, but it still hovers in the $220s.
Another possible explanation for the rise in transactions is the increase in daily transaction limits for Ethereum as a whole.
Ethereum, for now, has a daily gas limit of about 8 million. This limit was reached faster due to the use of airdrops and smart contacts which use a lot of gas.
While both were heavily used during the summer, their use has now reduced, particularly with airdrops.
This means that more transactions can be made due to fewer restrictions.