6 Month Low Ethereum Fees Suggests Altseason Is Inbound
Gas fees on the Ethereum network have dropped to a six-month low, despite a slight rally in Ether’s price over the weekend. Analysts at the cryptocurrency analytics firm Santiment suggest that this could indicate a potential rally for altcoins.
On April 27, the average transaction fee on Ethereum dipped to just $1.12, Santiment noted in an April 28 post on X.
Santiment explained, “Traders often oscillate between extreme sentiment cycles — believing that crypto is either soaring ‘To the Moon’ or is completely ‘Dead.’ These shifts in sentiment are often reflected in transaction fees.”
Santiment noted that transaction fees typically reach their highest levels during local market peaks and drop to lower “resting state” levels at market bottoms.
In February, Ethereum’s gas fees hit an eight-month peak due to surging interest in a new experimental token standard known as ERC-404.
The analytics firm suggested that the current low gas fees might be a precursor to increased activity on the Ethereum network and could signal the start of an altcoin rally.
As the price of Ether (ETH) climbed to $3,178, it gained 4.3% over the past week, as per CoinGecko’s data.
On April 27, the native tokens of Ethereum’s layer-2 networks — Optimism, Arbitrum, and Polygon — were among the top five performers in the top 50 cryptocurrencies by market cap. They recorded gains of 11.7%, 3.5%, and 2.8%, respectively.
At the same time, reduced network activity has caused the circulating supply of Ethereum to reach its highest level in the past month.
Over the last 30 days, 74,458 new ETH were issued, but only 57,516 ETH were burned, leading to a net increase in supply of 16,979 Ether (ETH), according to data from ultrasound.money.
This represents a significant shift from the previous five months of consistent deflation. Despite this recent rise in ETH inflation, over 437,000 ETH have been burned since the network transitioned to a proof-of-stake consensus mechanism, known as the Merge, on September 15, 2022.
