Cointelegraph Team
Cointelegraph
Gas fees on the Ethereum network have plunged to a six-month low even as the price of Ether (ETH $3,181) rallied slightly over the weekend, which analysts from crypto analytics platform Santiment say could signal an upcoming altcoin rally.
On April 27, the average fee for an Ethereum translation fell as low as $1.12, according to an April 28 X post from Santiment.
“Traders historically move between sentimental cycles of feeling that crypto is going ‘To the Moon’ or feeling that ‘It Is Dead’, which can be observed through transaction fees,” wrote Santiment.
Source: Santiment
Santiment explained that fees tend to peak around local market tops and fall back to “resting state” lows around the time of market bottoms.
Gas fees on Ethereum reached an eight-month high in February this year amid a tidal wave of interest in an experimental token standard called ERC-404.
The analytics platform suggested the low gas fees could indicate a future uptick in Ethereum network activity and herald the beginning of an altcoin rally.
With markets mainly retracing over the past 6 weeks, the lack of demand and strain on the network may help turn ETH and associated altcoins around sooner than many may expect.
It comes as the price of Ether rallied slightly, gaining 4.3% in the last week, per CoinGecko data.
On April 27, Ethereum layer-2 networks Optimism (OP), Arbitrum (ARB), and Polygon (MATIC $0.7026) accounted for three of the top five best-performing assets in the top 50 cryptocurrencies by market cap, gaining 11.7%, 3.5%, and 2.8% respectively.
Source: Luke Martin
Meanwhile, the lowered activity on the network has seen the circulating supply of Ethereum surge to its highest point in the last month.
In the last 30 days, 74,458 new ETH were issued while just 57,516 were burned, resulting in a net supply increase of 16,979 new Ether (ETH), per ultrasound.money data.
This stands in stark contrast to the previous five months, which have consisted of steady deflation. Despite the recent uptick in ETH-based inflation, more than 437,000 ETH has been burned since the network’s switch to a proof of stake consensus mechanism, dubbed ‘The Merge’ which occurred on Sep. 15, 2022.
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