Ethereum Gas Fees Hit Six-Month Low Suggests Imminent Altcoin Rally: Santiment

Gas fees on the ethereum network have fallen to their lowest level in six months. The average cost is $1.12 per transaction, marking the lowest figure since October 18.

Analysts at Santiment noted that this drop in gas rates could be the start of an upcoming altcoin rally.

ethereum gas fees plummet

According to Santiment, traders often alternate between periods of extreme optimism, often characterized by the belief that a given asset is destined for exponential growth, and periods of pessimism, marked by the feeling that it is declining.

<blockquote class="twitter-tweet”>

twitter.com/hashtag/ethereum?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#ethereumThe average fee level has fallen to just $1.12 per network transaction, the lowest one-day average cost since October 18.

Historically, traders move between sentimental cycles of feeling that twitter.com/hashtag/crypto?src=hash&ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>#crypto is going “To the Moon” or feeling like “He's Dead”, which can… pic.twitter.com/8b8rLMLyIf

– Sentiment (@santimentfeed) twitter.com/santimentfeed/status/1784511938476855337?ref_src=twsrc%5Etfw” data-wpel-link=”external” target=”_blank”>April 28, 2024

This fluctuation in sentiment is reflected in transaction fees, which typically peak around market highs and return to normal levels during market lows.

The recent drop in ethereum gas fees can be attributed to the Dencun upgrade and a general lull in the broader crypto market. These developments have reduced on-chain activity, which has subsequently reduced ethereum gas fees.

This is in contrast to just a few months ago, when gas fees on the ethereum network spiked to an eight-month high in February. This increase coincided with a substantial increase in interest around an experimental token standard known as ERC-404.

On February 9, gas prices peaked at an average of 70 gwei per transaction, equivalent to approximately $60 for a standard transaction. At their peak, gas costs rose to 377 gwei, a level not seen since May 12, 2023.

ethereum price has recently seen a modest rally, with a 4.3% gain over the past week, according to ethereum” data-wpel-link=”external” target=”_blank”>data

ethereum Circulating Supply Sudden Increases

Meanwhile, declining activity on the ethereum network has led to an increase in the circulating supply of eth, reaching an all-time high over the past month.

Data shows that over the last 30 days, 74,458 new eth were issued, while only 57,516 were burned, resulting in a net supply increase of 16,979 new tokens. This marks a change from the previous five months, which saw consistent deflationary trends.

Despite this recent spike in eth-based inflation, the network has burned over 437,000 tokens since transitioning to a proof-of-stake consensus mechanism in September 2022.

In other news, asset manager Franklin Templeton made headlines for list your spot ethereum exchange-traded fund (ETF) on the Depository Trust and Clearing Corporation (DTCC) website.

This development has reignited investor optimism about the possible approval of an ethereum ETF by the SEC, with expectations of a decision in May.

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