Ethereum gas fees hit record low as whale transactions decrease
Ethereum’s recent price drop below $2,600 has coincided with a decrease in gas prices and whale activity on the network. Data from CryptoQuant revealed that the average gas price on the Ethereum (ETH) network hit an all-time low of 2.9 Gwei, equivalent to around $0.026, on August 18. Currently, the average ETH gas price has slightly risen to 3 Gwei.
Despite the approval of Ethereum ETFs, the price of ETH has been facing challenges following the Dencun upgrade. The upgrade, implemented in March, enabled layer 2 networks to process their data on the Ethereum mainnet, leading to a notable reduction in fees. Only 115 ETH, valued at approximately $300,000, were burned as gas prices reached an all-time low. Ethereum’s price remained stable around the $2,600 range amidst broader market uncertainties.
The decline in Ethereum gas prices can be attributed to the Dencun upgrade, which facilitated layer 2 networks’ operations on the mainnet, resulting in a significant fee decrease. However, a CryptoQuant analyst warned that diminishing network fees might pose long-term challenges such as “user and liquidity fragmentation.” Despite the introduction of spot ETH exchange-traded funds in the U.S., the analyst noted a 35% drop in ETH price alongside a 197,000-token supply increase.
Concurrently, Ethereum’s whale activity has been dwindling in tandem with reduced fees. Santiment data revealed a consistent drop in whale transactions involving at least $100,000 worth of ETH over the past week, decreasing from 5,371 on August 12 to 2,138 unique transactions currently.
As of the latest data, ETH has experienced a 3% decline over the past 24 hours, trading at $2,580. However, its daily trading volume surged by 32%, surpassing the $10 billion mark. These fluctuations in gas prices, whale activity, and overall market performance underscore the dynamic nature of the Ethereum ecosystem.
In conclusion, Ethereum’s recent price movements, coupled with shifts in gas prices and whale activity, reflect the ongoing evolution and challenges within the cryptocurrency space. The interplay of network upgrades, market dynamics, and investor behavior continues to shape the trajectory of Ethereum and its broader ecosystem.
