Ethereum’s gas fees have hit an all-time low as the network experiences a significant drop in whale activity and its price falls below $2,600.
On August 18, Ethereum’s daily mean gas price plunged to a historic low of 2.9 Gwei, equivalent to approximately $0.026, according to an X post by CryptoQuant. Although gas prices have since slightly increased, the average still remains low at 3 Gwei.
This drop in gas fees has coincided with a decrease in Ethereum’s price, which has been consolidating around the $2,600 level amidst market-wide uncertainty. The network saw only 115 ETH, valued at around $300,000, burned as gas prices reached this all-time low.
A key factor contributing to the sharp decline in Ethereum gas prices is the Dencun upgrade, launched in March 2024. This upgrade allowed Layer 2 networks to execute their data blobs on the Ethereum mainnet, leading to a significant reduction in fees.
However, a CryptoQuant analyst has raised concerns about the potential long-term implications of declining network fees. The analyst warned that lower fees could lead to issues like “user and liquidity fragmentation” within the Ethereum ecosystem. The analyst also noted that despite the approval of spot Ethereum exchange-traded funds (ETFs) in the U.S., Ethereum’s supply has increased by 197,000 tokens, while its price has dropped by 35%.
In addition to falling gas fees, Ethereum has also seen a decline in whale activity. Data from Santiment shows that the number of large transactions—those valued at $100,000 or more—has steadily decreased over the past week. The number of these whale transactions dropped from 5,371 on August 12 to 2,138 unique transactions as of the latest reports.
As of the time of writing, Ethereum’s price has declined by 3% in the past 24 hours, currently trading at $2,580. Despite this price drop, Ethereum’s daily trading volume has surged by 32%, surpassing the $10 billion mark.
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