Bitcoin and Ether transaction fees have fallen to their lowest levels in months amidst one of the harshest weeks for the crypto market in 2024.
As of June 23, the average Bitcoin transaction fee dropped to $1.93, the lowest since October 2023. This decrease indicates reduced network activity and competition.
Bitcoin network transaction fees typically surge during high market volatility, particularly when prices rise. Increased price speculation leads to greater competition for block space.
Historically, every major bullish period since 2012 has seen a rise in fees, except during the 2021 bull run when Bitcoin’s price reached $69,000 but fees remained relatively stable.
Ether gas fees have also plummeted to new lows, with prices reaching as low as 1 gwei, the lowest in years. Currently, the gas fee on the Ethereum network is about 4.5 gwei.
Gwei, a denomination of Ether, is used on the Ethereum network for transactions. One gwei equals one-billionth of one ETH.
The significant drop in Ethereum gas fees is linked to activity shifting from Ethereum’s base layer to its layer-2 network following the March Dencun upgrade.
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Since the upgrade, average gas prices on Ethereum have fallen by about 92%. According to Layer2 Insider, layer-2 networks earned $950,000 in the past week.
The reduced transaction fees on Bitcoin and Ethereum come during one of the worst weeks for the crypto market in 2024. Bitcoin’s price fell below the $63,000 support level, and several altcoins suffered double-digit losses.
The crypto market has experienced significant growth over the last six months, with top cryptocurrencies like Bitcoin and several altcoins reaching new all-time highs.
However, in recent weeks, bears have dominated, liquidating billions in the leveraged market and causing heavy losses for spot holders.
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