"Ether Surges 7% on Memecoin Frenzy, Then Plunges as Traders Cautious"

Ether (ETH) has experienced a notable rally of 7% in recent trading, driven by a surge in transaction fees following the launch of a new memecoin protocol. Despite the initial exuberance, data reveals that traders are cautious, as much of the price increase was attributed to a temporary uptick in network activity linked to a little-known project.

According to Etherscan data, addresses related to the “Wall Street Pepe” token dominated Ethereum transactions, accounting for over 25% of fees during a key trading period. This surge in activity briefly pushed Ether's price to a two-week high of $2,850, but traders remain skeptical as network activity stabilizes.

The recent volatility in Ether's price underscores the reactive nature of the cryptocurrency market to new project launches. On February 17, ETH reached a two-week high of $2,850, marking a notable rally driven by a sharp rise in transaction fees. These fees spiked dramatically from an average of $0.70 to peaks of over $70 per single transaction, generating initial optimism among investors eager to capitalize on the Ethereum network's increased activity.

However, this optimism was short-lived as the transaction fees normalized, leading to a swift drop in ETH's value—wiping out $100 within an hour post-peak. Market analysts noted that the fee surge was largely a consequence of the launch of the “Pepu Pump Pad,” a memecoin launchpad on an Ethereum layer-2 chain, which triggered a frenzy of activity that soon fizzled out. Traders quickly recalibrated their expectations, driving down sentiments in futures markets and trimming ETH's 24-hour gains to under 2%.

To understand traders' responses to the ETH price movements, it's crucial to examine ETH monthly futures contracts. The futures basis rate, reflecting derivatives traders' sentiment, remained stable at 6% on February 17, indicating that professionals remained cautious even amidst the price surge. Typically, ETH futures trade at a premium reflecting the longer settlement periods, so the stability suggests a balanced perspective rather than overwhelming bullish sentiment.

Moreover, spot Ethereum exchange-traded funds (ETFs) in the United States reported a modest inflow of $2 million from February 5 to February 14. In stark contrast, ETH E