Gas fees on the Ethereum network have dropped to their lowest point in six months, despite a slight increase in the price of Ether (ETH) over the weekend. Crypto analytics platform Santiment believes that this could be a sign of an upcoming altcoin rally. On April 27, the average fee for an Ethereum transaction fell to as low as $1.12, according to Santiment. The platform explains that fees tend to peak during market tops and decrease during market bottoms. Earlier this year, gas fees on Ethereum reached an eight-month high in February due to increased interest in the ERC-404 token standard. The recent decrease in gas fees could indicate a future increase in Ethereum network activity and the beginning of an altcoin rally.
CoinGecko data shows that the price of Ether has rallied slightly, with a 4.3% gain in the past week. On April 27, three Ethereum layer-2 networks, Optimism (OP), Arbitrum (ARB), and Polygon (MATIC), were among the top five best-performing assets in the top 50 cryptocurrencies by market cap, with gains of 11.7%, 3.5%, and 2.8% respectively.
In contrast, the reduced activity on the Ethereum network has led to an increase in the circulating supply of Ether. In the last 30 days, 74,458 new ETH were issued, while only 57,516 were burned, resulting in a net supply increase of 16,979 new Ether (ETH), according to ultrasound.money data. This is a significant change from the previous five months, which saw a steady decrease in supply. Despite the recent increase in ETH-based inflation, over 437,000 ETH has been burned since the network transitioned to a proof-of-stake consensus mechanism, known as ‘The Merge’, in September 2022.