IMPORTANT POINTS:
- Fee Reduction on Ethereum: Average fees on the Ethereum network have decreased significantly.
- Growth in Layer 2 solutions: As Layer 2 solutions facilitate rate reductions, the number of users on these platforms has exceeded 4 million.
- ETH Price Stability and Fluctuation: Ethereum has maintained a price range around 3,000, with expectations of a potential increase.
Ethereum, known for its high transaction fees, has recently seen a significant change, with a notable decrease in the average cost of transactions on its network.
Decline in Average Ethereum Fees
According to recent data from Santiment, average fees on the Ethereum network have decreased in recent weeks. As of April 28, average fees had fallen to around 1.28, the lowest point since October 2023. In parallel, the number of ETH fees burned has also decreased, reaching its lowest level in months, with nearly 355,000 burned.
Comparatively, in March, the average rate was over 15, with total burned rates of more than 35 million. However, an AMBCrypto analysis of the fee trend in Crypto Fees has revealed a notable decrease in Ethereum fees in recent weeks. At the time of publication, the total network fee was approximately 3.3 million, indicating that fees have been reduced by half compared to previous weeks.
Are Layer 2 Solutions Absorbing Ethereum Transactions and Fees?
Ethereum’s latest update has facilitated a reduction in fees on Layer 2 (L2) solutions, leading to an increase in transaction volume. An examination of the number of L2 users has shown growth in recent months, currently exceeding 4 million users. However, a detailed analysis by Grow the Pie indicates that the number of active addresses on major L2s is less than 2 million.
AMBCrypto analysis also showed a decrease in transaction count, which was around 6.3 million. Additionally, an evaluation of fees on L2 platforms revealed a significant decline over the past 30 days, with total fees less than 1 million. This suggests that despite the growing number of users, the decline in active users and fees indicates a reduction in transactions.
ETH Price Outlook and Possible Increases
AMBCrypto analysis of the Ethereum price chart indicated that it has largely remained within the 3,000 price range in recent days. Although it briefly reached the $4,000 mark in March, it has since retreated from that level. There was also a period in April when it fell below the 3,000 threshold.
Notably, at the end of last week, a significant increase was seen, with a 3.93% increase bringing its price to around 3.253. However, at the time of writing, it has seen a drop of over 4.75%, trading around 3,161.
Given the pattern seen in fees, there are signs that traders are anticipating an upcoming increase in Ethereum price, which could set the stage for an increase once Ethereum price starts to rise.
