Ethereum gas fee drops to five-year low: data

Gas fees on the ethereum network have been declining since March 2024, but last week they hit a level not seen in the past five years.

Facts about the Dune cryptocurrency analytics platform sample that the average ethereum gas fee fell below 2 gwei last week for the first time since 2020.

Average ethereum fees plummet

Since August 3, the average ethereum gas fee has fallen below 2 gwei. While the figure has seen subsequent spikes, those increases have only been temporary, with fees eventually falling back below 10 gwei.

On Friday morning, the average gas fee stood at 1.4 gwei and even dipped as low as 1.1 gwei before rising to 1.9 gwei at the time of writing. It is worth noting that the real-time gas price was also hovering around 1.93 gwei at the time of writing.

The drop in ethereum gas prices in real-time and on average can be attributed to several factors, including investor sentiment, a general decline in the broader cryptocurrency market, and the Dencun upgrade, which significantly reduced ethereum transaction fees. Gas fees on the network typically spike when the market is up and enthusiasm is high, but return to normal levels when investor sentiment turns negative.

About six months ago, ethereum gas fees surged to a level not seen since May 2023 as the market was excited about the launch of spot bitcoin exchange-traded funds in the United States. Users paid up to 70 gwei per transaction. Ether (eth) rose to the $4,000 level at the time before crashing along with the broader cryptocurrency market.

eth drops 3% on the day

The drop in ethereum’s average gas fees also coincides with eth’s negative trajectory over the past week. Data from CoinMarketCap shows eth trading at $2,560 at the time of writing, down 1.75% over the past seven days and down 3.3% over the past 24 hours.

A tweet from on-chain analyst Ali Martinez x.com/ali_charts/status/1824399991185526992″ data-wpel-link=”external” target=”_blank”>identified The $2,300 – $2,380 region is a critical support zone for eth if the downtrend persists because 1.62 million addresses purchased over 50 million eth at that level. Notably, data from IntoTheBlock shows that over 90% of addresses that purchased eth between $2,220 and $3,008 are currently in profit.

Meanwhile, as market experts stipulated in a previous analysis, the drop in gas fees could signal the beginning of an altcoin rally.

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