Ethereum Blob Fees Slump: Technical Analysis Eyes $1,920 Resistance
Ethereum (ETH) is showing signs of resilience, currently trading above $1,850 and up by over 2.2% in the past 24 hours. This modest recovery comes against a backdrop of significant structural challenges for the world’s second-largest cryptocurrency ETH/USD, which has faced four consecutive months of negative price action.
Ethereum’s Revenue Crisis Following Dencun Upgrade
Ethereum’s revenue model has been fundamentally changed by the March 2024 Dencun update. Ethereum just received 3.18 ETH from blob fees—about $6,000—marking a 73% weekly drop and a 95% decline from mid-March for the week ending March 30.
VanEck reports that although the update effectively lowered prices for consumers by moving L2 transaction data to offchain “blobs,” it lost overall fee income by up to 95%. “ETH Fees Were Weak Due to Lack of Blob Revenues as L2s Have Not Filled Available Capacity,” VanEck’s head of digital asset research, said.
With Michael Nadeau of The DeFi Report projecting L2 transaction volumes will need to rise 22,000-fold to equal prior peak revenues, this begs basic questions about Ethereum’s scaling approach.
ETH/BTC Ratio at Five-Year Low
Last witnessed in May 2020 when ETH traded between $150 to $300, the Ethereum-to– Bitcoin ratio has dropped to 0.021, a five-year low. Monthly costs dropped to $22 million in March 2025, the lowest since June 2020, therefore reducing network activity as well.
Though these alarming numbers, past trends give some promise. Five times in its past, Ethereum has seen three or more consecutive bearish monthly candles; each instance finally forms a temporary bottom. ETH historically has a 75% chance of performing positively in April; Q2 has the fewest drawdowns and average returns of 60.59%.
Ethereum Recovers DEX Dominance
Positively, Ethereum came back to be the top smart contract blockchain used for DEX trade in March. DefiLama claims Ethereum traded over $64.6 billion, more than Solana’s $52.6 billion for the first time since September.
This change could be a reflection of conservative market behavior amid declining markets since traders see the established Ethereum chain as a safer choice in uncertain times.
ETH/USD Technical Analysis: Ethereum Attempts Recovery Amidst Resistance
Currently trading above $1,850 and with a positive trend line supporting $1,860, Ethereum’s 100-hourly Simple Moving Average is Near $1,900 and $1,920 the price encounters main opposition.
ETH breaking above $1,920 might aim for $1,970 and maybe $2,020. On the other hand, neglect of the $1,861 support might cause the fall toward the psychological $1,700 level to be prolonged. At forty the daily RSI shows residual negative momentum.
What’s Next for Ethereum?
Even with present difficulties, Ethereum’s economic model is changing. The next Pectra Upgrade could solve income issues and overhaul blob space allocation.
As Sassal from The Daily Gwei observed: “The plan is simple: scale Ethereum as much as possible to capture as much marketshare as we can – worry about fee revenue later.”
Ethereum’s future depends on its capacity to create a sustainable business model and act as a useful data availability layer for L2 networks, therefore impacting investors and developers. Technical signals point to possible short-term recovery, but the basic difficulty of matching lowered fees with network security is still unresolved.
The next few months will be vital as the market observes if historical trends of Q2 resiliency will hold true for Ethereum in 2025 and whether forthcoming protocol upgrades will solve the present income shortage.
ABOUT THE AUTHOR
See More
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals