On-chain data shows that the average ethereum transaction fee has recently fallen to $1.15, which is a new low for 2023 so far.
ethereum transaction fees have seen a reduction recently
According to data from the on-chain analysis firm Holy, fees on the eth network have decreased over the past few days. The relevant indicator here is “average fees,” which tracks the average fees (in USD) that users apply to their transactions on the ethereum blockchain.
Generally, the amount of transfer fees that users can pay depends on the degree of competition present on the network. When the mempool is congested, transactions can get stuck for a while as the blockchain only has a limited capacity to process transactions.
Some senders who rush to make their moves during those times may opt for higher-than-average fees so that network validators prioritize their transfers.
Others can do the same and in this way the average can go up. Therefore, when the network has exceptionally high activity, average rates can skyrocket to high values.
On the other hand, when there is little transfer activity on the blockchain, users have no incentive to pay high fees, so the average remains low.
Because of this relationship, average fees can be one of the ways to evaluate how active merchants are currently on the network. Now, here is a chart showing the trend of this indicator for ethereum over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Ethereum-Average-Fees-Have-Hit-New-Low-in-2023-Data.jpeg" alt="Average ethereum Fees” width=”2798″ height=”1766″/>
The value of the metric seems to have plummeted in recent days | Source: Santiment on X
The chart above shows that average ethereum fees have recently fallen sharply, suggesting that network activity has cooled considerably.
When Santiment shared the chart, average fees had dropped to just $1.15 per transaction, which was the lowest level seen since December last year, making it the lowest point of 2023 so far.
While low fees are a consequence of low activity, they can encourage greater utility on the blockchain, as a lower cost of movement means more users would be willing to exchange their coins. “Increased profits can lead to the recovery of market capitalization levels,” explains the on-chain analysis company.
eth price
ethereum has not been having the best of times recently, as its price recorded a 4% drop in the last week, putting it below the $1,600 level.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Ethereum-Average-Fees-Have-Hit-New-Low-in-2023-Data" alt="ethereum price chart” width=”1534″ height=”876″/>
Looks like eth has been struggling recently | Source: ETHUSD on TradingView
While bitcoin hasn’t been particularly impressive, the number one cryptocurrency has still shown more strength than ethereum. As a market intelligence platform In the block As you noted, the market capitalization ratio of the two assets has increased to 2.86, a new yearly high.
<img decoding="async" loading="lazy" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/09/Ethereum-Average-Fees-Have-Hit-New-Low-in-2023-Data.png" alt="ethereum Market Cap vs. bitcoin” width=”1120″ height=”582″/>
eth has performed poorly against btc during the past few weeks | Source: IntoTheBlock on X
Featured image by Shubham Dhage on Unsplash.com, TradingView.com charts, IntoTheBlock.com, Santiment.net
