Gas Fees On Ethereum Dropped To Lowest Levels In Three Years Amid Steady ETH Price

Ethereum (ETH) is experiencing its most significant decline in gas fees in three years.

Sophia Cruz•Monday, April 29, 2024•1 min read

Ethereum (ETH) is experiencing its most significant decline in gas fees in three years. Data from Dune Analytics indicates that the median gas fee has dropped to 6.43 gwei, marking its 7th lowest recorded price in a single day over the past three years.

Gas Fees On Ethereum Dropped To Lowest Levels In Three Years Amid Steady ETH Price

As Ethereum continues to face stiff competition from other Layer-1 blockchain solutions such as Solana, Ethereum (ETH) has managed to maintain its dominance. Despite this, Ethereum continues to be the favored option for decentralized applications (dApps) and decentralized finance (DeFi) projects. However, the increasing competition may contribute to potential network decongestion on Ethereum, leading to lower gas fees.

According to a report from Santiment, the average transaction fee on the Ethereum network has decreased to $1.12 per transaction, marking the lowest average cost the coin has seen in a single day since October 18th.

Furthermore, the correlation between transaction fees and market sentiment suggests that traders often oscillate between two distinct emotional cycles: optimism, where they believe that a cryptocurrency is poised for massive gains, and pessimism, often described as a belief that a cryptocurrency is stagnant or declining. These sentiments are mirrored in transaction fees, which is tend to increase during market peaks when optimism prevails and decrease during market bottoms.

Nevertheless, the analyst expressed optimism about the market, noting that it has undergone a retracement over the last six weeks. Consequently, the decrease in transaction fees shows a lack of demand and reduced strain on the ETH network. This could potentially catalyze a faster recovery for Ethereum and other related altcoins.

Meanwhile, the decrease in transaction fees had an immediate impact on the short-term movement of ETH prices. At this time of writing, Ethereum (ETH) is trading at $3,160.34, 4.33% lower in the last 24 hours.

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ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.