cryptoknowmics.com
Ethereum is known for its high gas fees. These high gas fees are a result of the increase in the adoption of its smart contract functionalities. Also, non-fungible tokens (NFT) based on Ethereum's blockchain surged in popularity throughout 2021 and the beginning of 2022, which also led to a surge in gas fees. However, as more projects are built on other smart contracts blockchains, waning interest in NFTs, and increasing hash rate, Ethereum gas fees have now dropped to the lowest since July 2021.
Gas Fee At Lowest In 10 Months
Calculated in gwei, Gas fees refer to the amount required to complete a transaction on the Ethereum network. Gas prices fluctuate constantly based on user demand and the supply of computational power from the network's miners. However, records indicate that Ethereum's gas fees have been steadily declining since the beginning of the year. It was reported earlier this month that ETH gas fees dropped to the lowest level in 7 months, reaching as low as $8. Clearly, the downward trend has persisted, as gas prices have recently dropped to their lowest point since July of last year. This was the month in which the NFT hype was at its highest point. It is expected that gas prices will continue to drop as consumer interest in NFTs continues to dwindle. According to a new report by Santiment, a website that focuses on providing on-chain data and metrics, the current cost of gas fee for traders is around $2.54 per transaction. To put this into perspective, people were paying hundreds of dollars in gas fees at a point last year. [embed]https://twitter.com/santimentfeed/status/1529164169840275456?s=20&t=cuLI8M4kZ3iMYNjip8J5pg[/embed]
Increasing Hash Rate
An increase in the hash rate is positive for any network. Ethereum's hashrate has been on the rise in recent months, breaking the previous record of all-time high multiple times in only the month of May alone. The fact that a network has a high hash rate is a solid predictor of its level of security, so this is some good news. It means that a high number of miners are verifying transactions. The highest average hash rate of 1,126,674.2703 GH/s was recorded on May 13th of this month.
Will there be an increase in the price of Ethereum?
A low gas fee can be considered a positive indication of Ethereum's market price. According to Santiment, Ethereum’s price has always reacted well the majority of the time after its gas fees dipped below $5. However, because the current bear market has been active for some time, it is better to wait and observe how it develops before making any investment decisions. A significant price increase might not be possible at this time. In addition, there is not a lot of market history to look to for more information. Even when it had high gas fees, Ethereum still maintained its position as the second most popular cryptocurrency. The dropping gas fees provide encouragement for more user transactions; nonetheless, investors should continue to exercise caution until the bear market is over. According to data from CoinMarketCap, Ethereum is down 9.69% in 24 hours and is currently trading at $1,760.74. It managed to break the $2,000 mark briefly two times already this week, although that's small compared to its all-time high of $4,730.