Ethereum gas fees have plummeted to a six-month low, indicating a potential altcoin rally, according to analysts from Santiment. Gas fees, which tend to peak around market tops and decline around market bottoms, have fallen to as low as $1.12, suggesting a lack of demand and strain on the Ethereum network. This could signal an upcoming uptick in activity and the beginning of an altcoin rally.
Ethereum Gas Fees Plummet, Signaling Potential Altcoin Surge
Ethereum's network congestion has eased significantly, with average gas fees dropping to a six-month low of $1.12 on April 27, according to data from crypto analytics platform Santiment. This notable decline comes even as the price of Ether (ETH) has shown a slight uptick over the weekend.
Analysts at Santiment believe this drop in gas fees may indicate an impending rally in alternative cryptocurrencies (altcoins). They note that historically, market cycles for cryptocurrencies fluctuate between periods of euphoria ("To the Moon") and pessimism ("It Is Dead"), which can be gauged by transaction fees.
During market peaks, gas fees often spike due to increased network activity. Conversely, during market downturns, fees tend to fall back to "resting state" levels.
In February this year, Ethereum gas fees reached an eight-month high amidst a surge of interest in the experimental token standard ERC-404. However, the recent decline in fees suggests a potential reversal in network activity.
Santiment posits that the low gas fees could herald the beginning of an altcoin rally. With markets experiencing a retracement over the past six weeks, the reduced demand and strain on the Ethereum network could set the stage for a potential upswing in ETH and related altcoins.
This prediction aligns with the modest price increase Ether has experienced in the last week, gaining 4.3% according to CoinGecko data. The combination of low gas fees and rising ETH prices suggests an optimistic outlook for altcoins in the near future.
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