The reduction of transaction fees on the Ethereum network to a six-month low of $1.12 may indicate the onset of an altcoin season, according to Santiment.
? #Ethereum‘s average fee level has dipped to just $1.12 per network transaction, the lowest average cost in a day since October 18th.
Traders historically move between sentimental cycles of feeling that #crypto is going “To the Moon” or feeling that “It Is Dead”, which can… pic.twitter.com/8b8rLMLyIf
— Santiment (@santimentfeed) April 28, 2024
“Traders historically go through cycles of sentiment—from ‘to the moon’ to the notion that cryptocurrency is ‘dead’. This can be observed through transaction fees,” analysts wrote.
According to experts, fees typically peak at local market highs and drop to “resting state” lows during downturns.
In February 2024, fees rose to an eight-month high amid a wave of interest in the experimental ERC-404 token standard. The current low levels may herald a rise in network activity and positive price trends, experts warned.
“With markets having mostly retraced over the past six weeks, the lack of demand and network load could turn Ethereum and related altcoin prices around sooner than many expect,” they noted.
The decline in activity led to an increase in available supply by 17,333 ETH over the past 30 days. During this period, issuance amounted to 74,470 ETH, of which 57,137 ETH was burned, according to ultrasound.money.
This sharply contrasts with the previous five months, which saw consistent deflation.
Back in April, analyst PlanB predicted the start of an altcoin season in the summer, followed by a correction in the third quarter.
Earlier, K33 Research identified the meme coin rally as a sign of the phenomenon’s onset.