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Gas fees on the Ethereum network have fallen to their lowest levels in six months, coinciding with a modest uptick in ETHs price.

Analysts from the crypto analytics platform Santiment interpret the drop in gas fees as a potential indicator of an impending altcoin rally.

Santiment reported that the average fee for an Ethereum transaction dipped to just $1.12.

The platform noted that transaction fees tend to mirror cycles of investor sentiment, alternating between periods of high optimism and significant pessimism.

Gas fees typically reach their peak during market highs and then decrease to lower levels during market lows.

Earlier in the year, Ethereums gas fees hit an eight-month peak in February, driven by heightened interest in the experimental ERC-404 token standard.

The current low gas fees on the Ethereum network might signal a potential uptick in activity, possibly setting the stage for an altcoin rally.

According to Santiment, the recent market retracement, along with decreased demand and less strain on the network, could lead to a faster than expected recovery for Ethereum and related altcoins.

According to CoinGecko, Ether has seen a 4.3% increase over the past week, which aligns with observations of a minor rally in its price.

Furthermore, on April 27, three Ethereum layer-2 networksOptimism (OP), Arbitrum (ARB), and Polygon, were ranked among the top five best-performing assets within the top 50 cryptocurrencies by market cap. These networks posted gains of 11.7%, 3.5%, and 2.8% respectively.

However, the downturn in network activity has resulted in an increase in the circulating supply of Ethereum.

In the past month,74,458 new ETH were issued while only 57,516 were burned, leading to a net supply increase in supply of 16,979 ETH. This development contrasts with the steady deflation observed over the previous five months.

Its important to note that Ethereum moved to a proof-of-stake consensus mechanism, known as The Merge, on September 15, 2022. This was part of an effort to reduce the overall supply of Ethereum and potentially increase its value over time. Since then, more than 437,000 ETH has been burned.

The Ethereum network reported a robust income of $365 million in the first quarter of 2024. This represented year-on-year revenue growth of 155%.

This figure represents a substantial 200% increase compared to the $123 million profit recorded in the fourth quarter of 2023. A major factor contributing to this growth was the surge in decentralized finance (DeFi) activity during the three months.

Ethereums fee revenue, generated through user transactions, reached a notable milestone of $1.17 billion in the first quarter of 2024. This represented a 155% increase from the same period in 2023 and an 80% upswing from the previous quarter.

The increase in network activity, driven by the growth in DeFi applications, has propelled Ethereums average daily transactions in 2024 to surpass last years figures. The current average of 1.15 million daily transactions is nearing the peak levels observed during Ethereums significant run in 2021.

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Altcoin Season Approaching? Ethereum Fees Dive, Analysts See Bullish Signal - CCN.com