Ethereum gas fees have dropped to a six-month low, a sign of the altcoin boom. Market participants and experts are both interested in the recent drop in Ethereum transaction fees, which happened at the same time as Ether’s price surged by 4.3%.
Santiment says that the fact that the average transaction cost for gas dropped to just $1.12 on April 27 has big effects on the cryptocurrency market as a whole, especially for altcoins.
Related articles
Reasons for the Fee Drop?
One big reason is less traffic on the network. Fees usually go down when there are fewer transactions. The latest upgrade at Dencun has also helped make things run more smoothly.
Historically, such declines in gas fees have often preceded periods of heightened activity and price appreciation in altcoins. Santiment’s analysis suggests such drops happen around market bottoms, indicating a potential reversal in sentiment and the beginning of an altcoin rally.
This observation is supported by Ethereum’s sustained deflationary trend post-Merge, where more ETH has been burned than issued over the past five months, adding to a reduction in overall supply.
ETH Gas Fee Drop to Push Altcoin Rally?
However, around this downward trend in gas fees and the potential for an altcoin rally, recent data also reveals a notable increase in Ethereum’s circulating supply. In the last month, 74,458 new ETH were issued, surpassing the 57,516 ETH burned during the same period.
While this uptick in supply may seem concerning, it’s essential to note that Ethereum has continued to maintain a deflationary trajectory overall since the Merge, with more ETH burned than issued.
Despite the recent increase in circulating supply, the cumulative amount of burned ETH since the Merge remains significant, indicating continued network activity and demand for Ethereum. This suggests that while there may be short-term fluctuations in supply dynamics, the broader market sentiment towards Ethereum remains positive.
ETH Price Analysis
Ethereum may break through from a technical chart pattern at $3,300. The market is optimistic for ETH due to the recent whale activity like James Fickel buying ETH, which shows bullishness.
Risk Disclaimer
Although Sponsored Trading can be profitable, it is associated with a significant risk of losing your investment. The risks will increase when trading on margin companies. Traders must exercise due diligence and be careful when making their trading decisions. It is the sole responsibility of the Trader to learn and acquire the knowledge and experience required to use the Trading Platform and anything that will be required to trade properly
