Ethereum Gas Fees Hit 5-Year Low, Signaling a Bull Run?Ethereum gas fees have been steadily declining recently, hitting a five-year low. According to DuneAnalytics data, the median gas fee fell to 0
Ethereum Gas Fees Hit 5-Year Low, Signaling a Bull Run?
Ethereum gas fees have been steadily declining recently, hitting a five-year low. According to DuneAnalytics data, the median gas fee fell to 0.6 Gwei this week, currently at 0.915 Gwei, a drop of over 95% from the 83.1 Gwei peak during the network's activity surge in March! This phenomenon has sparked market speculation about Ethereum's future trajectory: does the record-breaking drop in gas fees indicate an impending bull run for Ethereum?
The decline in Ethereum gas fees is not coincidental. Ryan Lee, Chief Analyst at BitgetResearch, points out that historically, whenever ETH gas fees hit rock bottom, it often foreshadowed a mid-term price bottom, and ETH prices typically rebound strongly after this cycle. And when this moment coincides with a rate cut cycle, the market's wealth-generating effect is full of possibilities.
Ryan Lee believes that the main reasons for the decline in gas fees on the Ethereum mainnet are:
- Insufficient demand for Ethereum block space. Recently, transaction activity on the Ethereum network has decreased, leading to less demand for block space.
- Competition from other blockchains. Faster and cheaper blockchains like Solana and Layer2 are attracting more users and applications, causing Ethereum users to migrate to other platforms.
- Dengcun upgrade improves network efficiency. The upcoming Dengcun upgrade is expected to improve the efficiency of the Ethereum network, thus lowering gas fees.
Ethereum's price has been relatively flat recently, and trading enthusiasm has also stagnated. After the approval of Ethereum spot ETFs at the end of July, the price has been steadily declining, hitting a new low of $2111 on the 5th, the lowest since the beginning of January this year. A rebound has occurred, with the price reaching a high of $2780 on the 14th. The current price is $2602.
It's worth noting that transaction activity on both Solana and Tron is currently more active than on Ethereum. Defillama data shows that daily gas fees on Tron currently reach $1.52 million, Solana at $846,000, while Ethereum is only $834,000. Daily revenue is $1.52 million, $423,000, and $300,000, respectively.
Earlier this month, Pump.fun, a meme coin launch platform on the Solana ecosystem, generated $5.33 million in revenue on a single day, exceeding the combined revenue of public chains like Ethereum, Tron, and Solana. Last month alone, Pump.fun generated $28.73 million in revenue, bringing the platform's total revenue to $94 million.
Meanwhile, according to Lookonchain monitoring, since the launch of SunPump, the first meme coin launch platform on the Tron ecosystem, 4,844 meme coins have been established on Tron, generating revenue of 1.84 million TRX ($246,600).
While the decline in Ethereum gas fees has sparked market speculation about Ethereum's future trajectory, it remains unclear whether Ethereum is about to enter a bull run. The decline in gas fees is merely an indicator of market changes. Investors need to consider other factors, such as the overall development of the Ethereum network, market sentiment, regulatory policies, etc., to judge the future direction of Ethereum.
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