Bitcoin and Ethereum transaction fees fall to 7-month low
2 min readBitcoin and Ethereum transaction fees have fallen to their lowest levels in several months as the cryptocurrency market endured one of its most challenging weeks of 2024.
On June 25, Bitcoin’s average transaction fee was $2.34 per transaction, the lowest it has been since October 2023. Such a reduction in fees is generally indicative of lower network activity and reduced competition for block space.
Typically, Bitcoin transaction fees tend to increase during periods of high market volatility, especially when prices are rising. Increased price speculation leads to increased competition for block space.
However, not all periods of rising prices lead to an increase in fees. For example, during the 2021 bull run, when the price of Bitcoin reached $69,000, transaction fees remained relatively low, deviating from the usual pattern seen since 2012, where periods of rising prices coincided with rising fees.
Ethereum transactions fees at all time low
On the other hand, Ether gas fees recently hit a new all-time low, with prices falling to 1 gwei, the lowest level in years. Currently , the average gas fee on the Ethereum network is around 6 gwei.
Gwei is a smaller unit of Ether, used in the Ethereum network for transactions such as buying and selling goods and services, being equivalent to one billionth of an ETH.
The significant reduction in Ethereum’s gas fee can be attributed to the shift of activity from the base layer of the network to layer 2 networks, a phenomenon that intensified after the implementation of the Dencun upgrade in March.
Since this update, average gas prices on Ethereum have dropped by around 92%. As per a report by Layer2 Insider, layer 2 networks generated $950,000 in revenue in the last week.
Cryptocurrency market experiences one of the worst weeks of 2024
The reduced transaction fees across major cryptocurrency networks coincide with one of the most challenging weeks for the market in 2024. Bitcoin saw its price fall below the $63,000 support, while several altcoins posted significant double-digit losses.
Despite significant growth over the past six months, where Bitcoin and some altcoins reached new price records, recent weeks have shown a predominance of bearish trends .
Bears took over the market, resulting in the liquidation of billions in leveraged positions. As a result, there were huge losses for investors who held their cryptocurrencies without selling.
