Zhu Su, the founder of bankrupt Three Arrows Capital (3AC), stated yesterday on social media platform X that Ethereum investors can buy when network gas fees are low and sell when they are high. But is this strategy really effective?
According to data from Ethereum Gas Tracker, the gas fees on the Ethereum mainnet have been rising over the past 7 days, with only April 20th to 21st experiencing relatively low fees. CoinGecko data also shows that the price of Ethereum has been trending upwards over the past 7 days, reaching a high of $3,281 on April 24th, the highest in nearly a week.
When comparing the price of Ethereum and its gas fees over the past 7 days, there seems to be a certain positive correlation. However, if we expand the timeline to one month, the correlation between gas fees and price weakens.
Gas fees are the transfer fees required to complete transactions on the blockchain. When gas fees are high, it is due to an increase in network activity, and miners prioritize transactions with higher fees, thus driving up the fees.
There are various factors that affect network transaction volume. For example, when there is a meme coin frenzy on Ethereum, an increase in participants will drive up transaction volume. While this may also incentivize an increase in ETH price, it cannot be used as a golden standard to judge the rise and fall of Ethereum. Investors should consider multiple indicators before making judgments.
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