Ethereum Transaction Fees Hit Four-Month Low: Is a Decline in User Activity Looming?
The transaction fees on the Ethereum network have hit a four-month low, signaling a potential decline in user activity on the platform. According to Santiment, the average fee per transaction on Ethereum is currently at $2.34, a significant drop from its peak of $15 earlier this year. This decrease in fees is attributed to a decrease in daily demand and activity on the blockchain over the past month.
The drop in user activity has also impacted Ethereum’s non-fungible token (NFT) and decentralized finance (DeFi) sectors. NFT sales volume on the network has fallen by 57% in the last 30 days, while the total value locked in DeFi has decreased by 14% since its peak. Additionally, the increase in ETH supply due to the drop in network activity has added downward pressure on the altcoin’s price.
Despite the decline in network fees, Santiment suggests that Ethereum’s price may be near its bottom and a rally could be on the horizon. The Age Consumed metric, which tracks the movement of previously idle coins, has shown a significant increase on 18 April, indicating a potential price bottom. However, past data suggests that similar spikes in the Age Consumed metric have been followed by price declines, indicating that a top may have been reached.
With the current bearish market sentiment and the upcoming Bitcoin halving event, the future of Ethereum’s price remains uncertain. It will be interesting to see how the network activity and user demand evolve in the coming weeks.
