Ethereum Gas Fees Plunge to 6-Month Low: Signal of an Altcoin Rally?

Ethereum Gas Fees Plunge to 6-Month Low: Signal of an Altcoin Rally?
Table of Contents


  • Ethereum’s network fees have dropped to a six-month low, with the average transaction fee falling to as low as $1.12. This decrease might indicate an upcoming altcoin rally.
  • The low gas fees could signal a surge in Ethereum network activity, potentially triggering an altcoin rally. Layer-2 Ethereum networks—Optimism, Arbitrum, and Polygon—have been among the top-performing assets.
  • Despite a recent increase in ETH-based inflation, the Ethereum network reported a robust income of $365 million in Q1 2024, marking a significant year-on-year revenue growth.

Ethereum’s network fees have plunged to a six-month low, suggesting that an altcoin rally may be on the horizon. The average fee for an Ethereum transaction has fallen as low as $1.12, marking its lowest daily average cost since October 18, 2023.

Although the price of Ether saw a slight rally over the weekend, gas fees fell significantly. According to analysts at Santiment, a crypto analytics platform, this decrease in gas fees might be an indicator that an altcoin rally is forthcoming.

Transaction fees typically mirror the ebbs and flows of investor sentiment, oscillating between periods of heightened optimism and deep-seated pessimism. During times of market prosperity, gas fees usually reach their zenith, only to recede to more modest levels when the market hits a low point. 

Notably, Ethereum’s gas fees soared to an eight-month peak earlier this year in February, driven by a heightened interest in the novel ERC-404 token standard.

The Role of Layer-2 Networks in Ethereum’s Performance

Ethereum Gas Fees Plunge to 6-Month Low: Signal of an Altcoin Rally?

The current low gas fees might be a sign of an impending surge in Ethereum network activity, which could possibly trigger an altcoin rally. According to Santiment, the recent market pullback, along with the decreased network demand and stress, could pave the way for a faster-than-anticipated recovery for Ethereum and its related altcoins.

Data from CoinGecko indicates that Ether has seen a 4.3% increase over the last week, hinting at a minor price rally. Furthermore, on April 27, three Layer-2 Ethereum networks—Optimism (OP), Arbitrum (ARB), and Polygon—ranked among the top five highest-performing assets in the top 50 cryptocurrencies by market capitalization, recording gains of 11.7%, 3.5%, and 2.8% respectively.

The decrease in network activity has resulted in a rise in Ethereum’s circulating supply. In the last month, there were 74,458 new ETH introduced, while only 57,516 were eliminated, leading to a net increase in the supply of 16,979 ETH. This is in stark contrast to the consistent deflation observed in the preceding five months.

It’s worth noting that since Ethereum transitioned to a proof-of-stake consensus mechanism, known as ‘The Merge,’ on September 15, 2022, more than 437,000 ETH has been burned. Despite the recent increase in ETH-based inflation, the Ethereum network reported a robust income of $365 million in the first quarter of 2024, an impressive year-on-year revenue growth of 155%.


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