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Ethereum, the second-largest cryptocurrency, might be the cheapest to use in about nine months, data from on-chain sources reveal.
According to on-chain analytics firm IntoTheBlock, Ethereum fees fell to a nine-month low this week as gas costs dropped to as low as one gwei, or around $1 for a swap transaction. This is the lowest level in the past nine months, dating back to December 2023.
Ethereum fees reached a nine-month low this week, with gas costs dropping as low as 1 gwei (~$1 for a swap transaction) pic.twitter.com/f2Br1dfBtd
— IntoTheBlock (@intotheblock) August 2, 2024
Per a graphic posted by IntoTheBlock, the total daily fees, paid by users for executing transactions on Ethereum, fell to $18.2 million, a 26.1% decrease over the week. The Ethereum price fell 8% weekly.
A decrease in total fees paid indicates low network usage, as fees are determined by the level of activity on the network, namely, the number of pending transactions.
The silver lining in this scenario is that reducing Ethereum costs may benefit both users and developers. Lower gas costs make it more economical to perform transactions on the Ethereum network, encouraging more activity and usage.
Ethereum price action
Ethereum's price fell alongside the rest of the markets in a slide that took off at the week's start as investors anticipated the Fed's decision on interest rates.
Though markets hailed the Fed's indications that interest rates may be cut as soon as September, sentiment immediately changed to trepidation when economic data showed an unexpected increase in unemployment benefit filings and additional weakness in the manufacturing sector on Thursday.
That triggered further selling on the crypto markets amid renewed fears that the Fed may be waiting too long to begin decreasing interest rates. At the time of writing, Ethereum was down 4.1% in the last 24 hours to $3,003 after reaching intraday lows of $2,985.
According to crypto analyst Michael Van de Poppe, Ethereum is holding onto a crucial area of support. If this is lost, Ethereum might test lower than $2,800 as the final big correction. If that does not happen and the ETH price rotates back up from here, it might be "party time."