The Ethereum blockchain network’s transaction fee has dropped to a four-year low at just $0.41, which has led to mixed sentiment among the ETH community. Traders and investors are evaluating whether this development could help in ETH price surge to $3,000 and above after facing strong selling pressure in recent weeks.
Ethereum Transaction Fees Drop to 4-Year Low, Will the Trend Reverse?
Popular crypto analyst Miles Deutscher noted that the average transaction fee on the Ethereum network has touched a four-year low at $0.41. Just for context, the transaction fee was at a high point of $15.21 just two years back. However, key developments on the network such as the Dencun upgrade and others have played a key part in this massive fee reduction.
Source: The Block
Meanwhile, the market sentiment remains divided on the transaction fee drop. Popular crypto analyst Miles Deutscher raised questions about whether ETH gas fee can pick up again as alternative blockchains continue to offer reliable and scalable transaction solutions.
He added that Ethereum’s dominance in DeFi and NFTs has waned slightly due to competition. However, he also believes that emerging use cases such as real-world asset (RWA) tokenization and broader adoption of blockchain-based financial instruments could reignite demand for ETH.
On the other hand, blockchain analytics firm Santiment reported that low fees typically indicate reduced congestion on the network, suggesting a decline in trading activity or application usage. Analysts often view such periods as favorable for mid-to-long-term ETH price outlook. It further added that extremely low fees, like those currently observed, tend to encourage users to return, potentially boosting the Ethereum network’s utility and activity over time.
Source: Santiment
ETH Price Recovery Likely Ahead?
A recent Ethereum price analysis hints at a potential rally to $10K. However, the sentiment has faded as the altcoin has struggled to hold its crucial support zones in the past. On the other hand, the macro factors are also not in favor of ETH at this point. Crypto analyst Ali Martinez has observed a significant shift in ETH price momentum, turning from positive to negative.
Source: Ali Charts
Blockchain analytics platform SpotOnChain has reported a significant Ethereum transaction from a large-scale investor. The Ethereum whale deposited a net 23,330 ETH, valued at approximately $61.9 million, to Binance over the past four days. The transactions were executed at an average price of $2,654 per ETH, suggesting a potential bearish outlook on the asset.
Source: SpotOnChain
The only positive development is that Ether ETF inflows have remained strong so far in February. These ETFs have recorded an impressive $393 million in net inflows. Furthermore, BlackRcok Ether ETF (ETHA) has taken the lead significantly outpaces the capital entering Bitcoin ETFs. According to data from Farside Investors, the current inflows into Ether ETFs are now seven times higher than they were in January.
As of press time, ETH price is trading 1.7% up at $2,707 with daily trading volume down 17% to $21,5 billion. Market analysts believe that the altcoin season could be at risk if ETH fails to hold the support of $2,600.
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