Ethereum (ETH) Price targets $3,000 as Vitalik Buterin Calls for Gas Fee Review

Key Insights:

• Vitalik Buterin called for a 33% increase in gas limit during an AMA session organized by Ethereum Foundation’s research team on Jan. 10.
• According to Etherscan, the current gas limit is 30 million the proposed 33% will take it to 40 million. 
• ETH price is up 14% in the daily time frame amid optimism that Vitalik’s new proposal could improve the overall scalability of the Ethereum network.

Ethereum (ETH) price is currently exchanging hands for $2,600 at noon trading hours (GMT) on Thursday, Jan 11, up 14% in the daily time-frame. Recent events suggest Vitalik Buterin’s proposal to increase Gas Fee limits has contributed to optimistic sentiment surrounding the ETH network.  

Vitalik Buterin Calls for Gas Fee Limit Increase in Latest AMA Appearance

Ethereum co-founder Vitalik Buterin has called for a “modest” gas limit increase to potentially improve network transaction throughput.

“Honestly, I think doing a modest gas limit increase even today is reasonable,” Vitalik Buterin, Jan 10 2024. 

Buterin made the proposal during the 11th Reddit ask-me-anything (AMA) session hosted by the Ethereum Foundation’s research team on Jan. 10. 

He noted that the gas limit, which had been periodically reviewed, has not been increased for nearly three years, the longest time ever in the Ethereum protocol’s history.

Buterin also followed up the suggestion with a brief calculation. The current gas limit is 30 million, according to Etherscan. Buterin’s suggested increase of 33% would take the new limit to around 40 million. 

The average gas limit just after Ethereum’s genesis in 2015 was around 3 million, which has increased over time along with network usage and adoption.

What is Ethereum Gas Limit and How Will an Increase Impact ETH Prices

The Ethereum gas limit represents the maximum amount of gas spent on executing each block of transaction or smart contract. Gas, measured in Gwei is the fee paid to to conduct a transaction or execute a contract on the Ethereum blockchain.

Typically, a gas limit is set to ensure that blocks are not too large, which could have a major impact on the network performance and synchronization. With the transition the Proof of Stake (PoS) Node validators are also able to adjust the gas limit dynamically within specific parameters as they produce blocks.

Theoretically, an increase in the gas limit suggested by Buterin would increase scalability, by allowing more transactions into each block. This would increase the overall throughput and capacity of the network to process transactions. 

Average gas prices, or the cost of transacting on Ethereum, are currently around 35 gwei or $1.89, according to Etherscan. However, this Gas limit increase could allow more transactions to be folded into each block, lowering overall costs. 

Forecast: Can Ethereum Price Reach $3,000?

Within 24 hours of Vitalik Buterin’s gas limit increase proposal, Etherum price has climbed above the $2,600 peak for the first time since May 2022. The bulls culd now set their sights on the $3,000 milestone. 

In the daily timeframe, Bollinger Band technical indicators also confirm this bullish stance. It currently shows that with ETH currently trading at $2,655, it has now moved above the upper-band at $2,539. This alignment indicates the momentum has now flipped bullish.   

However, for the bulls to validate the $3,000 ETH price forecast, they must first scale the psychological resistance around $2,800. But if Ethereum price can smash that resistance, it could head toward $3,000 as predicted.  

onversely, to invalidate this positive price outlook, ETH bears will have to force a downswing below $2,300 territory. But in that case, the bulls could avert major losses by mounting a support buy-wall at the lower Bollinger Band of $2,325.