Recently, several encouraging trends have emerged regarding the Ethereum blockchain, one notable aspect being the substantial decline in transaction fees after a period of exorbitantly high costs, which has been a historical barrier for users.
Ethereum Transaction Fees Hit Record Lows
The average transaction fees on the Ethereum network have significantly decreased to new lows, providing users with the benefit of lower costs for transactions. Santiment, a prominent market intelligence and on-chain data platform, announced this development in a recent update on the X (formerly Twitter) platform, highlighting a remarkable reduction in on-chain activity alongside an increase in the adoption of scaling solutions.
It’s worth noting that as the blockchain nears its tenth anniversary, transfer fees have fluctuated significantly over the years. This trend indicates that the Ethereum network is becoming more efficient, which could lead to greater acceptance and utilization as the previous high transaction costs diminish.
According to Santiment, the current average transaction cost on Ethereum stands at $1.63, a figure that encourages traders to increase their transactions. Santiment also provided a chart illustrating ETH’s transaction costs at various thresholds.
In a four-tier visual presentation, Santiment emphasized that when ETH average network fees fall below $2, it enhances the token’s utility, often seen at market bottoms. Conversely, fees typically fluctuate between $2 and $6 during sideways or stagnant markets.
Additionally, Santiment observed that elevated fees, in the range of $6 to $10, generally arise during periods of FOMO associated with bull runs. Finally, when Ethereum’s transaction fees exceed $10, there is typically a decrease in utility, often occurring at market peaks.
As the market stabilizes, Ethereum’s reduced gas prices may contribute to the continued progress of the ecosystem’s Decentralized Apps (dApps) and Decentralized Finance (DeFi) protocols by lowering the barriers to entry for many participants over time.
Is ETH Approaching the $2,400 Threshold Soon?
Despite these positive developments for the network, ETH’s price is still exhibiting a bearish trend. Currently, it is nearing $2,600, a level not reached in over a week amid a broader market recovery. As the altcoin faces challenges, analysts at IC News have highlighted the possibility of further price decline toward the $2,400 mark.
IC News reported that Ethereum’s price is currently testing the triangle pattern trendline as a potential support level, having dropped significantly with a 2.7% long red candle. Backed by a trading volume of $19.2 billion, this decline indicates sellers’ determination to thwart additional rallies.
The platform posits that a daily ETH candle falling below the 100-day Exponential Moving Average (EMA) and $2,650, driven by bearish momentum, may empower bears to push prices down further. Consequently, ETH could see a price drop of approximately 9% while seeking support around $2,400.
Featured image from Unsplash, chart from Tradingview.com
