Ethereum Gas Rate Drops to Five-Year Low: Data

Gas rates on the Ethereum network have been declining since March 2024, but last week they reached a level not seen in the last five years.

Data from crypto analytics platform Dune shows that the average Ethereum gas fee fell below 2 gwei last week for the first time since 2020.

Average Ethereum fees plummet

Since August 3rd, the average Ethereum gas rate has fallen below 2 gwei. Although the figure has seen subsequent spikes, these rises have only been momentary as rates eventually return below 10 gwei.

Earlier on Friday, the average gas rate was 1.4 gwei and even dipped as low as 1.1 gwei before rising to 1.9 gwei at the time of writing. Notably, the real-time gas price was also around 1.93 gwei at the time of publication.

The drop in real-time and average Ethereum gas prices can be attributed to several factors, including investor sentiment, a general decline in the broader crypto market, and the Dencun upgrade, which significantly reduced transaction fees from ‘Ethereum. Grid gas rates typically shoot up when the market is bullish and excitement is high, but return to normal levels when investor sentiment turns negative.

About six months ago, Ethereum gas rates rose to a level not seen since May 2023 as the market buzzed with excitement over the launch of 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 falling alongside the broader crypto market.

ETH down 3% daily

The drop in Ethereum’s average gas rates also coincides with ETH’s negative trajectory last week. Data from CoinMarketCap shows that ETH was trading at $2,560 at the time of writing, up 1.75% over the past seven days and up 3.3% over the past 24 hours.

A tweet from chain analyst Ali Martinez identified the $2,300-$2,380 region as a critical support zone for ETH if the downtrend persists as 1.62 million addresses bought over 50 million of ETH at this level. In particular, data from IntoTheBlock shows that more than 90% of addresses that bought ETH between $2,220 and $3,008 are currently making a profit.

Meanwhile, as market experts stipulated in an earlier analysis, falling gas rates could signal the start of an altcoin rally.

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