Ethereum's gas prices hit an all-time low of 2.9 Gwei on August 18.
The Dencun upgrade reduced fees but raised concerns about network stability.
Whale activity on Ethereum dropped by 60%, indicating reduced investor confidence.
Gas prices on the Ethereum network have dropped significantly, reaching a new all-time low on August 18. This change comes after the recent Dencun upgrade, which had a significant impact on the network's price structure.
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Ethereum's average gas price decreased to 2.9 Gwei, or around $0.026, the lowest amount recorded. In spite of the fact that gas costs have subsequently somewhat increased to 3 Gwei, the numbers are still remarkably low.
The Dencun Upgrade's Impact
The Dencun upgrade, which began in March 2024, played a significant influence in this drop. Dencun decreased fees significantly by allowing layer 2 networks to execute data blobs on the Ethereum mainnet.
While the move has made trades more affordable, some analysts are concerned about the long-term implications. Reduced fees may cause user and liquidity fragmentation, compromising the network's overall stability.
Declining Whale Activity and ETH Supply Increase
In addition to the drop in gas prices, Ethereum has faced further challenges. The ETH supply has grown by 197,000 tokens, resulting in a 35% reduction in price. The decline occurred despite the approval of Ethereum ETFs in the United States, which was expected to boost the market.
Furthermore, whale activity on the network has dropped dramatically. Santiment data shows a substantial reduction in large transactions, with the number of whale transactions surpassing $100,000 falling from 5,371 on August 12 to only 2,138. This reduction in whale activity suggests a lack of confidence among large investors.
Market-wide Uncertainty
ETH's current price is at $2,614, indicating the general uncertainty in the cryptocurrency sector. In the previous 24 hours, ETH has lost 3%. However, trading volume has risen by 32% to more than $10 billion. The increase in trading activity suggests that Ethereum is growing in popularity, despite the challenges it faces.
Ethereum is negotiating a complicated landscape, with gas prices at historic lows and whale activity decreasing. While the Dencun upgrade made transactions more economical, it also raised new questions about the network's viability.
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