• The Ethereum fee rose to over 9,000 ETH.
• Ethereum volume rose to over a ten-month high.

Recently, Ethereum’s [ETH] transaction fees have surged. This increase aligns with the ongoing upward trend in the asset’s price and the network’s preparations for an upgrade to reduce fees in the ecosystem.

Ethereum fee reaches months-high

An examination of transaction fees on the Ethereum network indicates a continuous increase since the beginning of March.

According to the chart on Glassnode, fees at the start of the month were approximately 6,300 ETH. At the time of this writing, fees have surged to over 9,000 ETH, marking the highest range observed in over ten months.

The fee escalation aligns with the observed rise in transaction volume over the past few weeks. It also coincides with the Ethereum developers establishing a date for the latest update.

Countdown to Ethereum Dencun

The Ethereum developers have set a target date of 13th March for the highly anticipated Dencun upgrade, marking the most significant changes since April 2023.

A key highlight of the Dencun upgrade is its “proto-dank sharding” feature, designed to reduce transaction costs on auxiliary “layer-2” networks built on Ethereum. 

This is achieved by providing a dedicated space for data storage. Introducing a new transaction class, the upgrade incorporates data “blobs” to lower the costs of publishing transaction data on roll-ups.

These blobs serve as a distinct space in a transaction where roll-up networks or other protocols can temporarily store data.

Volume data shows the reason for the fee spike

Analysis of Ethereum volume data provides insight into the recent increase in network fees. According to the chart on Santiment, on 6th March, the transaction volume was over $51 billion.

Notably, this transaction volume marked the first time since 2022 that Ethereum witnessed such high volume. The day before, the volume surged to over $47 billion, representing the highest recorded monthly volume.

At the time of this writing, the volume has declined significantly to over $27 billion, indicating a notable decrease.

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Ethereum suffers a slight decline

By the conclusion of trading on 6th March, Ethereum had surged to approximately $3,820, reflecting a remarkable 7% increase based on daily timeframe analysis. This price level marked the highest ETH had reached in over a year.

However, at the time of this writing, the price has experienced a slight decline of around 0.4%, settling at about $3,815. Despite this modest dip, it maintained its position within the $3,800 price range, indicating a resilient and strong bull trend at the time of this writing.