Ethereum Gas Hits All-Time Low as Prices Fall 25% in a Month

The Ethereum daily mean gas reaches a new milestone, hitting an all-time low, as price drop 25% in a month.

Despite recent developments like the approval of Ethereum ETFs and the Dencun upgrade, Ethereum’s daily mean gas price has plummeted to 2.9 Gwei. This sharp drop in fees, while beneficial to users, reflects broader concerns for Ethereum’s future, especially as much of its usage shifts towards Layer 2 networks.

Gradual Decline in Gas Prices

In previous years, Ethereum experienced significant fluctuations in gas prices, particularly during the height of the 2021-2022 DeFi boom.

Prices once surged past 400 Gwei due to increased network activity and congestion. However, this trend shifted by mid-2022, followed by a sideways movement in gas fees after which a steady decline followed.

By 2024, Ethereum’s mean gas price had fallen sharply, reflecting a consistent decrease in network fees. Notably, the introduction of ‘Blobs’ during the Dencun upgrade has facilitated substantial fee reductions for Layer 2 networks. This innovation has enabled networks like Arbitrum and Base to publish their data on Ethereum at a fraction of the cost. 

As a result, Ethereum’s daily mean gas fees have fallen to $0.85, the lowest in years, while its daily mean burn rate has plummeted to just 115 ETH. On the other hand, Ethereum’s  supply in the market has surged by over 197,000 tokens, while the price has plummeted 25%.

Increasing Whale Concentration 

Alongside the fall in gas prices, data from CryptoQuant and IntoTheBlock highlights a shift in Ethereum’s market dynamics.

While Ethereum ETFs have garnered approval, ETH’s price has declined by 35% since the Dencun upgrade, with supply rising by over 197,000 ETH. Furthermore, the distribution of Ethereum holders shows a growing concentration of wealth among whales. 

Over the last 30 days, large holders have increased their ETH holdings by 2.87%, while retail and mid-sized investors have seen declines of 0.86% and 1.44%, respectively. This trend indicates reduced participation from smaller investors, suggesting that interest in Ethereum may be consolidating among a smaller group of large holders.

Key Ethereum Support Zones Highlighted 

As Ethereum’s price continues to struggle, analysts have identified key support zones that could determine its next move. Crypto analyst Ali Martinez recently emphasized the significance of the $2,300 to $2,380 price range, where 1.62 million addresses collectively held over 50 million ETH by August 16. 

This concentration of holdings suggests that bearish market pressure may face significant resistance around this level.