Bitrabo Editorial
The average transaction fees on the Ethereum blockchain have decreased by almost 70% since early May. This drop is attributed to the reduced network traffic. The more traffic on the network, the higher the fees that users attach to their transfers. When there is no congestion, the network can handle the transactions without exorbitant fees. However, when there is congestion, transactions with the highest amount of fees are prioritized. The recent decrease in average fees could suggest low activity on the blockchain, but it also means users can use it for utility purposes due to the affordability of fees.
Decline in Ethereum Average Fees
On-chain analytics firm, Santiment, reported that the Ethereum average fee was around $14 a few weeks ago, but it has since dropped to $4.28. The surge in fees in early May corresponded to a rally in the asset’s price towards the $2000 mark. Such high transaction activity suggests a large number of active traders in the market, which is necessary to sustain sharp price action like a rally.
After the rally, the average fees decreased, indicating little activity on the blockchain. While low attention on the coin can hinder sustainable price movement, it is positive for users who can use it for utility without incurring high fees.
ETH Price
At the time of writing, Ethereum is trading around $1,800, indicating a 3% increase in the last week.
Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, Santiment.net