Ethereum transaction fees have fallen to their lowest levels since 2019, averaging $0.168. This decrease is accompanied by reduced user activity amid economic uncertainty. Despite this, the Pectra upgrade is scheduled for launch, promising enhancements such as lower fees and increased staking limits. Long-term holders are now selling their positions, indicating mixed signals for market stability as Ethereum’s price dips below $1,600.
Ethereum transaction fees have reached their lowest levels in five years, dropping to an average cost of approximately $0.168 per transaction, as reported by Santiment, an on-chain analytics platform. This decline is attributed to reduced user engagement with the network amidst prevailing economic uncertainty.
Market apprehension is evident as traders remain inactive, awaiting clearer global economic conditions before resuming normal trading behaviours. According to Brian Quinlivan from Santiment, historically, low transaction costs can signal potential price rebounds.
Ethereum’s development continues amid market turmoil, with the Pectra upgrade set to launch on May 7. This upgrade aims to enhance the network by increasing layer-2 blob capacity, reducing transaction fees, alleviating congestion, and permitting fee payments using stablecoins like USDC and DAI. Additionally, it will raise the maximum staking limit from 32 ETH to 2,048 ETH.
Long-term Ethereum holders are beginning to liquidate their positions, with notable sales occuring in the $1,500 to $1,700 range. While some analysts view these actions as a precursor to a broader market decline, others suggest it could stabilise prices.
Despite Ethereum’s price declining over 11% in the last fortnight, currently trading just below $1,600, the ongoing development activities coupled with waning retail interest may lead to unexpected market movements, as per Quinlivan’s insights.
