Despite a slight increase in Ethereum prices over the weekend, gas fees on the Ethereum network have fallen to a six-month low, which analysts at crypto analytics platform Santiment say could be a sign that altcoin season is coming.
According to Santiment’s April 28 post, on April 27, the average fee for the Ethereum network dropped to $1.12.
“Traders have historically torn between feeling that crypto is about to ‘skyrocket’ or feeling that ‘it’s dead,’ an emotional cycle, which can be observed through transaction fees,” Santiment wrote. ”
Santiment explained that fees tend to peak near the local market top and fall back to “stationary” lows near the market bottom.
In February, Ethereum’s gas fees reached their highest level in eight months due to strong interest in an experimental token standard called ERC-404.
The analytics platform suggests that lower gas fees could signal a future uptick in Ethereum network activity and the start of an altcoin rally.
“With a major market pullback over the past 6 weeks, a lack of demand and network pressure may help ETH and related altcoins turn things around faster than many expected. ”
According to CoinGecko, the price of Ethereum rose slightly, rising 4.3% in the last week.
On April 27, Ethereum Layer 2 networks Optimism (OP), Arbitrum (ARB), and Polygon accounted for three of the top 50 best-performing assets among the top 50 cryptocurrencies by market capitalization, with gains of 11.7%, 3.5%, and 2.8%, respectively.
At the same time, the decrease in network activity caused Ethereum’s circulating supply to soar to its highest point last month.
According to Ultrasound.money data, in the last 30 days, 74,458 new ETH has been issued, while only 57,516 ETH has been burned, resulting in an increase in the net supply of 16,979 new ETH.
This is in stark contrast to the previous five months, which were characterized by continued deflation. Despite the recent uptick in ETH-based inflation, more than 437,000 ETH has been burned since September 15, 2022, when the network moved to a proof-of-stake consensus mechanism, known as The Merge.