Bitcoin and Ethereum Fees Reach 7-Month Low

Bitcoin and Ether transaction fees have fallen to their lowest points in several months during one of the most turbulent weeks for the cryptocurrency market in 2024.

As of June 23, the average fee for a Bitcoin transaction was $1.93, marking the lowest rate since October 2023.

This decrease in fees is indicative of reduced activity on the Bitcoin network and diminished competition for transaction processing.

Typically, transaction fees on the Bitcoin network increase during periods of high market volatility, particularly when prices are rising, as more users compete for block space.

Historically, most bullish periods since 2012 have seen a spike in fees.

However, during the 2021 bull market, when Bitcoin prices reached $69,000, transaction fees remained relatively stable.

Similarly, Ether gas fees have also plummeted, with prices dropping to as low as 1 gwei, the lowest in years.

Currently, the gas fee on the Ethereum network stands at about 4.5 gwei.

Gwei, a fractional denomination of Ether, is used on the Ethereum network for transactions.

One gwei equals one-billionth of an Ether.

The significant reduction in Ethereum's gas fees is largely due to shifts in activity from Ethereum’s primary layer to its layer-2 networks following the March Dencun upgrade.

Post-Dencun upgrade, the average gas prices on Ethereum have dropped approximately 92%, with layer-2 networks accumulating about $950,000 in fees last week, according to Layer2 Insider.

These low transaction fees are occurring during a particularly challenging week for the crypto market in 2024, with Bitcoin dropping below the $63,000 support level and several altcoins suffering substantial losses.

Despite a significant upsurge in the crypto market over the last six months, where Bitcoin and some altcoins reached new highs, recent weeks have seen bearish control with extensive liquidations in the leveraged market and substantial losses among spot holders.

Sources:

https://cointelegraph.com/news/bitcoin-ethereum-transaction-fees-lowest-months

https://x.com/unnawut/status/1804735755312587014

https://ycharts.com/indicators/bitcoin_average_transaction_fee

https://ycharts.com/indicators/ethereum_average_transaction_fee