Ethereum sees revenue rise in September amid rising inflation rate

• Ethereum’s revenue in September was about 4x Solana’s after the Fed rate cut.
• Ethereum’s annual inflation rate rose to a two-year high of 0.74%.
• Ethereum has recovered the $2,395 support level and could rise to $2,595 if it breaks above the 100-day SMA.

Ethereum (ETH) surged more than 3% on Friday as recent reports indicate its on-chain revenue increased in September amid ETH’s annual inflation rate rising to a two-year high.

Ethereum’s monthly revenue growth is starting to recover despite the rising issuance rate

Ethereum’s revenue grew in September, surpassing that of Solana by more than 3-4 times, Swiss crypto bank Sygnum noted in a report on Thursday.

The leading blockchain by total value locked (TVL) has seen its revenue share steadily decline since Dencun’s update in March, which “led to a degree of cannibalization of Ethereum by its layer 2.”

Following a drop in on-chain activity following the August market crash, Ethereum revenue has hit a multi-year low. DefiLlama data shows that incomes have started to rise again after the US Federal Reserve (Fed) cut rates by 50 basis points.

Ethereum Revenue (Source: DefiLlama)

If market activity continues to pick up, Sygnum notes that L2s could benefit Ethereum in the long term.

“While Layer 2 protocols can divert business away from the Ethereum blockchain, these cheap and scalable networks also enable activities that were previously not economically feasible. Since it needs to establish the final state on the Ethereum main chain, this is expected to lead to transactions. and long-term revenue growth,” the bank concluded.

Ethereum co-founder Vitalik Buterin previously made similar arguments, saying that Layer 1 could offset the reduction in fee volume through massive scalability over time.

However, in the short term, investors may be concerned as Ethereum’s inflation rate rose to 0.74%, according to the October 2024 Binance Research Monthly Market Insights report. Binance analysts noted that ETH issuance is at a high since last couple of years as market share shifted to L2 and low chain activity reduced gas taxes, which in turn slowed its burn rate.

ETH Supply/Daily Issuance (Source: Binance Research)

Meanwhile, Ethereum ETFs saw outflows of $3.2 million on Thursday, according to data from Farside Investors.

Ethereum could rise to $2,595 after recovering the key support level

Ethereum is trading around $2,430 on Friday, up 3% on the day. Over the past 24 hours, ETH has seen $20.9 million in liquidations, with long and short liquidations accounting for $9.04 million and $11.86 million, respectively, according to Coinglass data.

On the 4-hour chart, ETH recovered the $2,395 level after finding support near a key downtrend line. Its price may have been defended by investors who had purchased 52.3 million ETH around the $2,316 to $2,385 region – the highest demand area, according to IntoTheBlock data.

ETH/USDT 4 Hour Chart

ETH could rise to $2,595 if it continues its bullish move and breaks above its 100-day simple moving average (SMA).

The Relative Strength Index (RSI) is approaching its neutral level, while the Stochastic Oscillator (Stoch) has an oversold trend.

A daily candlestick close below $2,395 will invalidate the thesis.