Ethereum transaction fees have plummeted to a five-year low of $0.168 per transfer, according to blockchain analytics firm Santiment. This sharp decline reflects a significant drop in network activity, with fewer users sending Ether or engaging with smart contracts.
Why Are Ethereum Transaction Fees Dropping?
Santiment’s marketing director Brian Quinlivan attributes the fall to a supply-and-demand dynamic. “When fewer people make transactions, fees naturally decrease,” he explained. The data highlights a consistent reduction in Ethereum’s user activity, signaling market caution.
Price Recovery Challenges
Low Ethereum transaction fees may hinder price recovery, Quinlivan warns. Ethereum trades at $1,595, up 1.27% in the past day and 0.32% over the last week. However, reduced network engagement suggests weaker demand, potentially delaying a bullish trend.
What’s Next for Ethereum?
Quinlivan notes the crypto community is likely waiting out global economic uncertainty. “We see heightened sensitivity to Ethereum news and economic discussions, as prices test long-term support,” he said. Low fees make transactions cheaper, but a rise in activity may lift both fees and prices once stability returns.
