The spiking gas fee on the Ethereum network has come back to haunt the cryptocurrency as it soared past $1600 yesterday creating a new ATH. As a result of the growing gas fee, Japanese crypto exchange Liquid Global has halted ETH and ERC-20 token withdrawals temporarily, promising to resume the service once the gas fee returns to normal levels.
We have temporarily halted ERC-20 and ETH withdrawals due to spiking GAS fees.
Service will be resumed once GAS fees return to normal levels.
All other crypto currencies are operating as per normal.
Thank you for understanding ????
— Liquid Global Official (@Liquid_Global) February 4, 2021
The issue of the Gas fee has troubled the Ethereum network for quite some time now and has only gone worse over the past year as the popularity of Defi spiked. The current gas fee for some transactions was almost as high as the price of ETH itself as one user posted a screenshot of their transaction.
— ⚡️KuSamORAI Jumper⚡️ (@JumperWave) February 3, 2021
A similar incident was noticed last year when someone had to pay thousands of dollars for one transaction on Ethereum. Vitalik Buterin, the co-founder of Ethereum has even claimed that the high gas fee leading to several blockages on the network was one of the key reasons behind the new ETH 2.0 network.
Does Rising Gas Fee Indicate a Temporary Price Top For Ethereum?
The rising gas fee has also led to speculations about Ethereum hitting a temporary top in its recent price surge after breaking $1,600. The gas fee surge is often followed by the price hitting a temporary top on several past occasions and many believe the same could happen with the current gas fee rise as well. The average gas fee is currently around $17 -$19 in some cases spiking to $93.
The rising gas fee has made many thriving defi protocols nearly unusable at the moment and if the trend continues it could soon reflect on the market price of the second-largest cryptocurrency.
Just did a test to compare fees. At the moment Gas Fees are extremely high. Checked the rates to Swap $eth to $link On $uni anything from $48 to $96 on #Honeyswap with $Xdai $0.000166. Imagine $uni v3 starts using $Xdai. $Stake token is a game changer. pic.twitter.com/0LRtXdd9q0
— Tyler Gekko (@GekkoTyler) February 4, 2021
Ethereum is currently in price discovery mode and many believed $1,800 is a possibility by the end of the week given its upcoming CME futures market launch and high trust fund premiums. However, the rising gas fee could prove to be a spoiler in the short term.