Ethereum remains one of the top blockchain networks in the dynamic world of cryptocurrencies, despite its reputation for high costs. However, the leading blockchain has undergone a significant shift as its total transaction fees have dropped to levels not seen in years.
Total Transaction Fees at Multi-Year Lows
While the crypto sector grapples with volatility, Ethereum has faced additional pressure due to recent developments in its total transaction fees. Over time, ETH's gas fees have discouraged user activity due to their high costs.
A recent report by Crypto Miners, a Binance affiliate, reveals that the Ethereum network's usage has slowed, indicating reduced demand for block space. Although lower fees reflect decreased demand, they also signal a slowdown in momentum across the ETH ecosystem.
Crypto Miners noted that ETH transaction fees have plummeted to their lowest level since 2020, marking a four-year low. This decline coincides with reduced on-chain activity and suggests easing congestion. The development could impact user engagement, DeFi activity, and NFT transactions—particularly for blockchain-dependent validators.
Using data from IntoTheBlock, Crypto Miners highlighted a ~60% drop in fees during Q1 2025, falling to $208M by April 4.
Key Factors Behind the Drop:
- Layer 2 Solutions: The rise of scaling solutions like Base (processing 80+ TPS) has significantly reduced costs.
- Dencun Update: This upgrade further optimized fee structures for scaling layers.
Amid weak network demand, Ethereum's price also tumbled to previous support levels. According to Crypto Miners, the altcoin dropped ~45% in Q1 2025—its worst first-quarter performance since 2022.
The ETH/BTC pair weakened further, hitting a five-year low. However, large investors (whales) continued accumulating ETH below $1,800.
Next Critical Support Levels for ETH
With volatility intensifying, on-chain analyst MAC_D identified key ETH price levels:
- Average Holder Cost Basis: $2,200 (most holders are currently at a loss).
- Whale Support Level: $1,290 (for addresses holding 100K+ ETH).
- Ultimate Floor: $870 (a historical low during the June 2022 Luna crisis).
👉 Explore real-time ETH price trends
FAQs
Q: Why are Ethereum transaction fees dropping?
A: Reduced demand for block space and efficient Layer 2 solutions like Base have lowered fees.
Q: How does this affect DeFi and NFT activity?
A: Lower fees may encourage more transactions, but decreased on-chain activity suggests weaker ecosystem momentum.
Q: What’s next for ETH’s price?
A: Watch the $1,290 whale support level; a break below could test $870.
Data sources: Crypto Miners, IntoTheBlock, CryptoQuant.
For deeper insights, check our Ethereum market analysis.