Gas fees on the Ethereum network have dropped to their lowest levels in six months, despite a slight rally in the price of ETH over the weekend.
Gas fees on the Ethereum network have dropped to their lowest levels in six months, despite a slight rally in the price of ETH over the weekend. Analysts from crypto analytics platform Santiment suggest that this could indicate an upcoming altcoin rally. According to Santiment, the average fee for an Ethereum transaction fell as low as $1.12 on April 27. The platform explains that transaction fees tend to peak around local market tops and return to lower levels during market bottoms, reflecting the sentiment among traders.
Gas fees on Ethereum reached an eight-month high in February, driven by the surge of interest in an experimental token standard called ERC-404. However, the recent decline in fees could signify an increase in Ethereum network activity and potentially mark the start of an altcoin rally.
"While markets have been retracing over the past 6 weeks, the lack of demand and strain on the network may help turn ETH and associated altcoins around sooner than many may expect," Santiment noted.
The decrease in network activity has led to a surge in the circulating supply of Ethereum. In the last 30 days, there has been a net supply increase of 17,183 new Ether (ETH). This contrasts with the previous five months, which experienced steady deflation. Despite the recent increase in ETH-based inflation, more than 437,000 ETH has been burned since 'The Merge' in September 2022.
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