Ethereum's Staking Rates and Gas Fees Ease as Meme Coin Frenzy Subsides

Hype around meme-based tokens on the Ethereum network is beginning to fade as the focus shifts towards BRC-20 tokens on the Bitcoin network. Ethereum's staking rates, which had climbed to a post-merge high of 8.6% on May 5 due to increased on-chain gas fees, have started experiencing a decline and currently stand at 6.72%, according to data from Coinpaprika.

The surge in meme coin frenzy on the Ethereum network was primarily driven by the unexpected launch of Pepe (PEPE), a meme token that witnessed an astronomical surge in trading activity and value in the following weeks. Nansen, a crypto analytics firm, reported that the number of PEPE holders exceeded 54,000 within just two weeks. Furthermore, the meme coin's market capitalization crossed the $1 billion mark after its addition to Binance's Innovation Zone on May 5.

However, as profit-taking intensified and trading volume declined, PEPE's trading volume quickly fell, and its market cap currently sits below the $1 billion mark. Its value has dropped by over 50% from it's all-time high of $0.000004354, which it achieved just five days ago.

The surge in trading activity on Ethereum led to an increase in gas fees. The median average transaction fee on the network rose to its highest level since May 2022, largely driven by PEPE's trading activity. However, as the token's trading volume waned, gas fees on the Ethereum network also started trending downwards. At present, the daily median gas fee stands at 87 gwei, falling from a high of 143 gwei recorded on May 5. Although still relatively high compared to the past year, this downward trend provides some relief to users who were facing escalating transaction costs.

Turning to Ethereum's price, the leading altcoin traded at $1,836.20 at the time of writing, experiencing a drop from its recent high of $2008 on May 6. Selling pressure has intensified, and key momentum indicators on the daily chart indicate that selling pressure outweighs buying pressure. For instance, Ethereum's Relative Strength Index (RSI) is at 44.97, while its Money Flow Index (MFI) sits at 48.24. The Chaikin Money Flow, also below its center line, stands at -0.05, indicating a liquidity exit and the potential for further price decline.

As the hype surrounding meme-based tokens on the Ethereum network subsides, the focus has shifted towards BRC-20 tokens on the Bitcoin network. It remains to be seen how these developments will shape the trajectory of the crypto market and the broader cryptocurrency ecosystem.