Recently, there has been a surge in the number of failed transactions on the Ethereum network, indicating that the market may be overheating. According to the crypto analytics firm, CryptoQuant, when the number of failed transactions on the Ethereum network rises above 200,000, it is usually a sign of market overheating and often leads to a price correction.
One of the reasons behind the surge in failed transactions is the competition for higher gas fees to complete transactions. As more and more users try to make transactions on the network, they end up competing to pay higher gas fees to get their transactions processed. If the gas limit is set too low, the transaction may fail, and users end up paying even higher fees to prevent damage to gas costs.
To prevent such situations, Ethereum allows users to specify a maximum gas limit to prevent transaction fees from becoming too high. However, the average gas limit has also been increasing recently, indicating that there may be an adjustment tax due to overheating. Nevertheless, it is expected to be a short-term phenomenon.
With the recent Ethereum Shanghai upgrade and network activation, there has been a surge in transactions. However, looking at the BTC MVRV cycle indicator, it seems that there is still room for further upside. Hence, experts advise using the corrective market to accumulate assets.
In conclusion, the surge in failed transactions on the Ethereum network may be a sign of market overheating. However, with the recent network upgrade and activation, it is expected to be a short-term phenomenon. Experts advise investors to use the corrective market to accumulate assets while keeping an eye on the BTC MVRV cycle indicator for further guidance.
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