Ethereum's transaction fees have reached their lowest in four years, reflecting decreased network activity. This change comes amid network upgrades and may lead to long-term shifts in Ethereum's usage and price trends.
Reasons for Fee Drop
Recent data indicates the 7-day moving average of Ethereum transaction fees decreased to $0.94, an 84% drop from the peak of $2.27. The average Ethereum gas price also dropped to 1.39 Gwei, matching levels last seen in 2020. These changes are driven by reduced on-chain activity and network updates.
Ethereum Upgrades
Reports suggest Ethereum's transaction fees decreased from $23 million to $7.5 million per day this week. This drop coincides with the upcoming major network upgrades, Pectra and Fusaka, scheduled for April this year.
Long-term Outlook
The reduction in fees can positively impact Ethereum’s medium and long-term price trends as it encourages new users to the market. Extremely low fees attract retail traders, potentially fostering the network’s activity and utility in the future.
The drop in Ethereum's transaction fees to four-year lows may open new opportunities for users and investors. This could create favorable conditions for attracting retail traders and supporting long-term network activity recovery.
