Ethereum Price Prediction: Does ETH insanely high gas fees kill its chances to reach $2,000?

One of the biggest issues with Ethereum, perhaps the most significant is the high gas fees whenever there is a lot of activity on the blockchain and its price has risen significantly. Normal Ethereum transactions can easily range from $5 to around $15. However, when it comes to interactions with smart contracts through Metamask and other options, the cost jumps to $50-100 and in some rare cases even higher than $100 for one single transaction.

DeFi projects that offer users the ability to stake or farm are extremely expensive currently. Users have to pay first for the approval which can be worth $20, then staking, which is an interaction with a smart contract, $30-100. Then if the user wants to claim his/her rewards, another payment will have to be made.

This means that small users do not have the ability to participate in many projects or even buy new tokens on Uniswap due to the significant costs. Paying $20 in fees for a $100 transaction is certainly not the best.

Nonetheless, most projects are still built on Ethereum as many users are hopeful for Ethereum 2.0.

Ethereum price can continue surging thanks to strong fundamentals

Just a few days ago, the giant crypto fund Grayscale bought $38 million worth of Ethereum after reopening the trust again. Additionally, CME Ethereum Futures is set to launch on February 8 which is also positive for the digital asset.

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The Eth2 deposit contract holds 2.95 million Ethereum coins inside worth more than $5 billion at current prices. Additionally, the number of Ethereum locked inside DeFi projects has grown to 7.63 million.

ETH/USD daily chart – TradingView

On the daily chart, ETH bulls have maintained a robust uptrend since October 2020 and surprisingly the RSI is not overextended. As long as Ethereum holds the 26-EMA support level, the uptrend will remain intact.