Ethereum's Low Gas Fees Could Indicate Upcoming Altcoin Surge, Says Santiment
Summary:
Ethereum network's gas fees have hit a six-month low despite a minor increase in Ether (ETH)'s price, possibly indicating an upcoming altcoin rally, as per Santiment. Ethereum transaction fees fell to $1.12 on April 27 and analysts predict an increase in Ethereum network activity due to low gas fees. Over the last week, Ether's price rose by 4.3%, as layer-2 networks Optimism (OP), Arbitrum (ARB), and Polygon (MATIC) performed well. Meanwhile, Ethereum's circulating supply increased after months of steady deflation.
The Ethereum network's gas fees have sunk to their lowest in six months, in spite of a marginal uptick in the price of Ether (ETH) over the past weekend. Analysts at crypto analytics firm Santiment suggest this decline might mark the onset of an altcoin surge. On 27th April, Ethereum transaction fees average dropped to $1.12, as stated in Santiment's post dated 28th April. "Traders fluctuate between belief cycles of crypto heading 'To the Moon' or being 'Dead', emerging through transaction fees," Santiment mentioned. According to analysts, fees usually climb during local market highs and fall to low resting state during market lows.
In February, Ethereum's gas fees hit an eight-month peak due to widespread interest in a novel token standard, ERC-404. Santiment proposes that the current low gas fees may predict an imminent increase in Ethereum network activity, possibly flagging off an altcoin surge. "The recent market decreases over the past six weeks, coupled with the reduced network strain and demand could help boost ETH and related altcoins sooner than projected," says Santiment.
Ether's price saw minimal gains in the last week, increasing by 4.3% as per CoinGecko data. On 27th April, three of the top five best-performing assets amongst the top 50 cryptocurrencies were Ethereum layer-2 networks Optimism (OP), Arbitrum (ARB), and Polygon (MATIC), increasing by 11.7%, 3.5%, and 2.8% respectively.
In the meantime, the reduced network activity has led to a surge in Ethereum's circulating supply over the past month. The last 30 days have seen the issue of 74,458 new ETH and the burning of 57,516 ETH, resulting in a net supply increase of 16,979 new Ethereum (ETH), according to data from ultrasound.money. This contrasts the preceding five months that saw a consistent deflation. Even with the recent ETH-based inflation rise, more than 437,000 ETH has been eliminated since the switch to a proof of stake consensus mechanism, known as 'The Merge', which took place on 15th Sep. 2022.
Published At
4/29/2024 4:39:05 AM
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