ETH approaches historical highs + Gas fees at a five-year low: Three major signals confirm that the bull run has arrived and is more stable than in 2021.

ETH is experiencing a "magical moment": this week it surged by 7%, and the current price is only 2% away from the historical high of $4891 in 2021. However, on August 16, the Gas fee dropped to 0.396 gwei, setting a five-year low. In contrast, BTC remains below $120,000 even after Powell's optimistic remarks, with funds continuously flowing from BTC to ETH. The ETH/BTC ratio has even broken through the 0.04 resistance level (the first time since the election season).

Don't get tangled up in "whether it's a precursor to a bull run"—the current market for ETH is not "preparing for a bull run," but rather "already in a bull run," and it is a "new bull market" with a foundation even stronger than in 2021. In 2021, ETH relied on conceptual speculation, but now it is supported by ecological strength, and three core signals are enough to prove this.

1. Dispelling Myths: Low Gas Fees ≠ No One is Playing, but rather ETH is "completely unclogged".

The pain points of the 2021 ETH bull run are still fresh in memory: NFT transaction gas fees soared to 300 gwei, and the fee for transferring 1 ETH exceeded 100 USD; now the daily transaction volume of ETH has surpassed 2 million (30% more than the peak in 2021), with active addresses exceeding 700,000, but the median gas fee is less than 1 gwei, and transferring once only costs a few dimes.

The core reason for the sharp decline in gas fees is that Ethereum has addressed the "congestion problem" through two key upgrades:

- EIP-1559 Protocol: Changes the past "retail bidding for blocks" model, introduces the "base fee burn" mechanism, automatically adjusts fees during congestion, and eliminates extreme situations of "hundreds of gwei".
- Layer2 (second layer network) sharding: Currently, 80% of DeFi transactions and NFT minting are completed on L2s such as Arbitrum and Optimism. For example, when swapping tokens on Uniswap using Arbitrum, the fee is only $0.1, which is 100 times cheaper than the mainnet (L1); L1 is only responsible for "secure settlement", significantly reducing network pressure, and gas fees naturally decrease.

Taking actual experience as an example: In 2021, buying NFTs on Opensea incurred a Gas fee of 80 dollars (far exceeding the price of the NFT itself); now purchasing through Arbitrum on Blur, the transaction fee is only 0.5 dollars and it arrives instantly. This is not a case of "no one is playing," but rather that ETH can "accommodate more people to play," and the old problem of "being blocked as soon as it rises" has been completely resolved.

2. Capital abandons BTC to invest in ETH: it is not a short-term repositioning, but a long-term "picking sides".

Recently, the trends of BTC and ETH are showing a "frozen fire" situation:

- BTC: Affected by the cooling of expectations for interest rate hikes by the Federal Reserve and weakened demand for safe-haven assets, it has dropped from $125,000 to $118,000, with both retail and institutional investors reducing their holdings.
- ETH: Up 7% against the trend, the ETH/BTC ratio has broken through the 0.04 resistance level that it had been stuck at for half a year, meaning 1 ETH can be exchanged for more BTC.

The essence of capital flow is "choosing future value":

- The core logic of BTC is "hedging". The current interest rate hike cycle of the Federal Reserve is nearing its end, hedging demand is decreasing, and funds are naturally flowing out.
- The core logic of ETH is "practical": its total value locked (TVL) in DeFi is nearing $100 billion, marking the first time since 2021. This means that $100 billion is being staked, borrowed, and traded within the ETH ecosystem, not just "speculating on coins", but "making money with ETH"—for example, ETH staking annualized returns reach 6.5%, far exceeding traditional bank deposit rates.

A certain institutional investor revealed that they have recently reduced their BTC position by 20% and increased their ETH holdings by 30%. The reason is clear: "BTC can only profit from price increases, while ETH can earn both price differences and staking rewards. The more active the ecosystem, the more stable the value of ETH. This is the long-term logic."

3. The new bull run is more stable than in 2021: Two major "hard indicators" confirm support strength.

In 2021, the ETH bull run "rose fiercely and fell hard," dropping from $4891 to $881, primarily due to speculation around NFTs and MEME coins, lacking actual demand support. Now, the rise of ETH is backed by two solid indicators, with a more stable foundation:

1. Low gas fees + high trading volume, still has growth potential.
When ETH rose to $4,800 in 2021, high Gas fees deterred many potential investors; now that Gas fees are low, even with more retail and institutional investors entering, the network can handle it and will not be limited by congestion on the price ceiling. If we compare ETH in 2021 to a "small supermarket" (it gets crowded when there are many people), now it is like a "large shopping mall" (it can accommodate more customers), making the sustainability of the market stronger.
2. TVL approaches 100 billion, the ecosystem's "self-sustaining capacity" is upgraded.
The TVL of ETH has risen from 30 billion USD in 2023 to now 98 billion USD, creating a "positive cycle"—for example, after staking 10 ETH, one can borrow 5 ETH to participate in DeFi, and after making a profit, further increase their holdings of ETH, thereby expanding the ecosystem. The peak TVL of ETH in 2021 was only 70 billion USD, and now it is close to 100 billion, indicating that the ETH ecosystem not only has "people participating" but also can "enable people to continuously make money," which is the core support for the continuation of the bull run.

4. Practical Suggestions: Get on ETH, keep a close eye on these two points.

Facing the market with ETH approaching its previous high, investors with different positions can refer to the following strategies:

- Those who haven't entered: don't chase high prices, wait for a pullback to 4600-4700 USD.
The current price of ETH is $4800, only 2% away from its previous high, and there may be some profit-taking in the short term (for those who entered at $4200, they have made a 15% profit and may take profits). The $4600-$4700 range is a relatively safe entry zone, with a stop loss set at $4500 (if this level is breached, the short-term upward trend may pause).
- Holders: Don't panic sell, keep a close eye on the ETH/BTC ratio.
As long as the ETH/BTC ratio remains stable above 0.04, it indicates that funds are still flowing into ETH, and you can continue to hold; if the ratio drops back below 0.038, you can reduce your position by 1/3 to lock in profits.

In addition, it is recommended to pay more attention to L2 dynamics (such as the changes in TVL of Arbitrum and Optimism) — the more active L2 is, the greater the demand for ETH, and the more considerable the long-term value. Subsequently, you can track on-chain data of ETH (such as Gas fees and TVL changes) to make decisions based on data, which is more reliable than blind guesses.

Final reminder: In the 2021 ETH bull run, many people missed opportunities due to high gas fees; in 2024, this time, gas fees are low, the ecosystem is active, and funds are entering the market. Missing out could mean waiting another 4 years. However, one must remain rational during a bull run: hold onto core assets, set stop-loss orders, and avoid greed for short-term profits to truly earn the benefits of the bull run. #Gate Alpha空投FST