Ethereum’s transaction fees have dropped to their lowest level in a very long time, depicting a bullish setup for investors. Ether’s average transaction cost has dropped to 0.00005 ETH, which is a massive decline from 0.005 ETH recorded in early 2024.
ETH price has struggled to keep up with other major altcoins, declining by 18% on a year-to-date (YTD) basis.
A drop in Ether transactions can be seen as EIP-1559’s fee-burning mechanism received approval. However, layer-2 scaling solutions like Arbitrum and Optimism have also eased congestion on the network.
Ethereum fees drop 97%
According to the analysis shared by Santiment, the average fee of an Ethereum transfer stood at $0.41 on February 18. It was a drastic drop compared to the $15.21 high point seen in the last 2 years. It highlighted that the low Ether transaction fees suggest that the network is not overly crowded. Santiment suggested that this is a good sign for mid-term and long-term price outlooks when users are not paying high prices to move their holdings.
It added that traders believe that these fee levels drop down when prices are seen as ‘low’ or ‘bearish’. Meanwhile, a cut in such costs makes it easier for new investors to enter the market.
On the other side, when transaction costs are high, it signals that a lot of activity is going on in the network, which can clog the chain and result in rising overhead for traders. A jump in transactions usually happens when ETH prices are gaining rapidly as more investors or traders want to jump in on the upward rally. However, a surge in Ethereum-based apps also pumps the gas fees.
💸 The average fee of an Ethereum transfer currently sits at just $0.41, in contrast to the $15.21 high point of the past 2 years. When Ethereum transaction fees are low, it usually means the network is not overly crowded. When users are not paying high prices to move their ETH… pic.twitter.com/G22qd3eTl8
— Santiment (@santimentfeed) February 19, 2025
Sometimes, extremely high fees can push traders away from the network, which can turn out to be a short-term correction. However, lower fees often allow the users to get back on the network and boost the utility.
ETH whale on the move
Ethereum has been dealing with massive selling pressure while other digital assets were gaining with the Bitcoin-led rally. ETH price dropped by 20% in the past 30 days. However, the second biggest crypto has hinted at a reversal here as Ether price has gained by more than 4% in the last 7 days. Ethereum is trading at an average price of $2,724 as of press time. Its 24-hour trading volume is down by 20% to stand at around $20 billion.
Data by SpotOnChain shows that a giant crypto whale seems to be turning bearish on Ether. The wallet deposited around 23,330 ETH (worth $61.9 million) to Binance at an average price of $2,654 over the past 4 days.
A giant whale has withdrawn a net 104,509 $ETH ($279M) from #Binance at an average price of $2,669 over the past 2 days!
Most of these $ETH have been supplied or staked across platforms like Etherfi, Lido Finance, Spark, Compound, Aave, Gearbox, and Morpho.
Meanwhile, $ETH is… pic.twitter.com/d6qVc1ag0F
— Spot On Chain (@spotonchain) February 13, 2025
It highlighted that its entry and exit points do not seem optimal as the whale has accumulated randomly at highs and offloaded at lows. The same whale wallet withdrew around 104K Ether (worth $279 million) from Binance on and before 13 February. The accumulation was made at an average price of $2,669.
