As the network transaction fees drop to roughly $1.12 per transaction, Ethereum users can finally breathe a sigh of relief since the figures are the lowest they have been since October 18th. This development is significant since users have had to accept high transaction fees during peak trade hours.
Ethereum Fee Fluctuations Mirror Market Sentiment Swings, Santiment Data Shows
According to data from Santiment, an industry-leading and reliable market intelligence platform that closely monitors more than 2,500 cryptocurrencies, provides a precise perspective of this noteworthy decrease. Throughout the years, the fees of Ethereum transactions have always been volatile in the context such apparent pressuring factors reflecting what traders feel about the asset’s price action.
It is necessary to note that traders’ sentiment regarding cryptocurrency prices changes back and forth, correlating with the level of transaction fees. Thus, when prices go up, and the metrics are at their highest, it is referred to as “to the moon”. On the other hand, when the two mentioned factors are at their lowest, it is considered “it is dead”. Therefore, during the peak and the low metrics of the fee, market activity is most intense.
Reduced Ethereum Fees Expected to Boost Network Engagement
The recent drop in Ethereum transaction fees coincides with the recent retracement that engulfed the cryptocurrency markets over the preceding 6 weeks. Throughout this period, there was a reduction in the demand for transactions, limiting the congestion on the Ethereum network and leading to fee declines.
Ultimately, there are several consequences for Ethereum and the broader cryptocurrency space due to the dipping transaction fees. Etherum is more accessible to the public since the network is more affordable to use. On the other hand, lower costs might encourage network engagement, owing to increasing transaction volume, especially on smaller transactions.
