Gas fees on the Ethereum network have been declining since March 2024, but last week reached levels not seen in the past five years.

Data from crypto analytics platform Dune shows that the average Ethereum gas fee fell below 2 Gwei last week for the first time since 2020.

Average Ethereum fees are falling

Since August 3, the median Ethereum gas fee has fallen below 2 Gwei. Although the number later increased again, these increases were short-lived as fees eventually fell back below 10 Gwei.

On the previous Friday, the median gas price was 1.4 Gwei and even dropped to 1.1 Gwei before rising to 1.9 Gwei at the time of writing. Notably, the real-time gas price was also fluctuating around 1.93 Gwei at the time of publication.

The plunge in real-time and median Ethereum gas prices can be attributed to several factors, including investor sentiment, a general decline in the broader crypto market, and the Dencun upgrade, which significantly reduced Ethereum transaction fees. Gas fees on the network typically skyrocket when the market is rising and excitement is high, but return to normal levels when investor sentiment turns negative.

About six months ago, Ethereum gas fees rose to levels not seen since May 2023, when the market was buzzing with excitement over the launch of spot Bitcoin exchange funds in the United States. Users were paying as much as 70 Gwei per transaction. Ether (ETH) rallied to the $4,000 mark at the time before crashing along with the broader crypto market.

ETH down 3% daily

The drop in Ethereum’s average gas fees also coincides with ETH’s negative performance over the past week. Data from CoinMarketCap shows that ETH was trading at $2,560 at the time of writing, down 1.75% over the past seven days and 3.3% over the past 24 hours.

A tweet from on-chain analyst Ali Martinez identified the region between $2,300 and $2,380 as a critical support zone for ETH if the downtrend continues, as 1.62 million addresses have purchased more than 50 million ETH at this level. Notably, data from IntoTheBlock shows that over 90% of addresses that purchased ETH between $2,220 and $3,008 are currently in profit.

Meanwhile, market experts noted in an earlier analysis that the decline in gas fees could be a sign of the beginning of an altcoin rally.