What do Ethereum’s low fees mean for its price?

Ethereum has emerged as the best-performing cryptocurrency in the past week, with its price surging over 6% to over $3,300.

In particular, blockchain analytics firm Sentiment reported that the increase in prices has hit its lowest level in six months due to a sharp drop in transaction fees.

Ethereum gas fees hit a six-month low

Ethereum's average transaction fee is approximately $1.12, which represents the lowest daily average cost since October 18, 2023. The introduction of Denkun's update and the delay in the broader crypto market have slowed down activity on the chain, leading to lower Ethereum gas fees.

This decline follows a high of $15.21 in March, during which time Ethereum showed strong price performance and growth in demand.

“Traders have historically moved between emotional cycles where they feel crypto is “going to the moon” or can be seen by trading fees when they feel it is “dead”. These fees move to highs (and sometimes diverges) at high price points and to rest at price lows. They will come back,” Santiment explained.

However, Santiment predicts that current gas prices could be attractive to traders, pushing the market out of its current slump. This development could help Ethereum and altcoins turn higher again.

Read more: Ethereum (ETH) Price Prediction 2024/2025/2030

Meanwhile, Consensys' efforts to address Ethereum's regulatory issues have sparked optimism. The firm initiated legal proceedings against the US Securities and Exchange Commission (SEC).

Consensys has argued that the SEC's effort to classify Ethereum as a security is a regulatory oversight. He added that such a classification would stifle innovation and negatively impact developers, investors and large institutions using Ethereum's decentralized framework.

“Ethereum is going to survive no matter what. It doesn't depend on one country or one group of people. But the influence of the US is terrible, because if the SEC has its way and declares Ethereum safe, then it can't be sold. Mostly people in America can't buy it,” said Consensus spokesperson. He told BeenCrypto.

Read More: Four Reasons Why Ethereum Is Not Safe: Consensus

Additionally, asset manager Franklin Templeton made headlines by listing an Ethereum exchange-traded fund (ETF) on the Depository Trust and Clearing Corporation (DTCC) website. This development from the ETF has renewed investors' hopes that the SEC may approve the Ethereum ETF in May.