Ethereum Gas Fee Drops Drastically As Price Hits All-Time High Above $4,700

Ethereum ETH/USD gas fees have dropped to uncharacteristically low levels in the last week despite the asset’s price surging to an all-time high of $4,762.

What Happened: According to data from Etherscan, the average transaction fee on the Ethereum network was $27.08, representing a decline of 11% in the last day.

On Tuesday of last week, average gas fees on Ethereum were as high as $56, meaning that in the last week, the average Ethereum transaction fee has declined by more than 50%.

Meanwhile, the price of Ethereum hit an all-time high Monday. The coin rallied 4% in the last 24 hours to hit a high of $4,762 at 1:30 a.m., according to data from CoinMarketCap.

At the time of writing, the second-largest cryptocurrency by market cap had a trading volume of $16.8 billion, up 16.84% in the 24 hours.

Last week, on-chain analytics provider Santiment pointed to Ethereum’s high gas fees as a potential reason for “trader reluctance.”

 #Ethereum is sitting at around $4,300 still, and gas fees are sitting at approximately $50, which does come with a higher risk of trader reluctance to circulate tokens, as a result. Average gas fees are also spiking mildly. https://t.co/YzMCqPP3xE pic.twitter.com/M1XPVgYmBp

— Santiment (@santimentfeed) November 1, 2021

The coin was trading at the $4,300 level and a spike in gas fee is likely to have dissuaded traders from circulating tokens across the blockchain.

Still, with the majority of DeFi and NFT platforms built upon the Ethereum blockchain, avoiding transactions entirely is often not an option.

Decentralized exchange Uniswap UNI/USD ranks first in Ethereum’s “Top 50 Gas Guzzlers,” having burned 1,792 ETH worth $8.5 million in the last 24 hours. Stablecoin Tether USDT/USD and NFT marketplace OpenSea rank second and third, using $3.5 million and $2.8 million, respectively, in ETH over the same period.

Photo by Old Money on Unsplash.