Ethereum fees drop to a 5-year low as transaction volumes lull

Transaction costs on the Ethereum network have dropped to the lowest level in five years as the amount of activity on the blockchain is in a lull, according to the onchain analytics platform Santiment.

Ethereum network fees are now around $0.168 per transaction and the reduction in fees coincides with fewer people sending Ether (ETH) and interacting with smart contracts, Santiment marketing director Brian Quinlivan said in an April 17 blog post.

“When many people are using Ethereum, users bid higher fees to get their transactions confirmed faster This drives the average costs up,” Quinlivan said.

“When fewer people are transacting, like we see now, users don’t need to bid much. As a result, the average fee drops,” he explained. “It’s essentially a supply and demand system.”

Quinlivan said that, from a trading perspective, low fees can preclude a price rebound, still, he added that traders appear to be patiently waiting for the global economic uncertainty to pass before scaling up their usual frequency of Ether and altcoin transactions.

Traditional and crypto markets tanked after US President Trump’s sweeping tariffs were announced on April 2. Many assets haven’t recovered to the same level as before their unveiling, despite tariff exemptions and a 90-day pause for most countries.

ETH has fallen over 12.5% in the past 14 days and has traded flat over the past 24 hours, hovering just under $1,600, according to CoinGecko.

“We can visibly see the increased sensitivity toward Ethereum discussions and tariff/economy news as prices have really threatened long-time support levels,” Quinlivan said.