Ethereum's Median Fees Drop by 88.7%,Hitting a Two-Month Low

Ethereum traders have a reason to smile because transaction fees dropped from November highs of $34.19 to $3.84 per transaction, representing an 88.7% decline.

Market insight provider Santiment explained:

“Ethereum traders and users are happy to see that the cost of transacting on the ETH network has fallen after being as high as $34.19 per transaction in November. Now at just 11.3% of the cost per transaction, there is more justification to move funds.”

Source: Santiment

On the other hand, Ethereum’s price has been experiencing an uptick, which can be linked to factors like ETH leaving exchanges in droves. Data analytic firm IntoTheBlock noted:

“ETH balance in exchanges continues to decrease. A total of 302,092 ETH has left centralized exchanges just in 2022. The recent drawdown has increased the outflows from exchanges, at the same time as more ETH continues to burn (1.72m).”

Source: IntoTheBlock

Furthermore, the second-largest cryptocurrency is attracting more users because addresses with one to ten ETH recently reached a new milestone by hitting the 1 million mark. 

Nevertheless, Ethereum faces significant resistance between $2,830 and $2,900, as shown by IntoTheBlock’s IOMAP indicator. 

Meanwhile, Ethereum’s burning rate skyrocketed in January thanks to the introduction of the London Hard Fork or EIP 1559 upgrade in August 2021. For instance, daily deflation reached historic highs on January 10 after 6823 ETH was burnt. 

Therefore, scarcity was prompted every time Ether was burnt after being used in transactions.

The London Hard Fork also enabled users who wanted to conduct their transactions faster than the standard provisions of the network to add a tip to validators to fast-track their transactions. Part of this tip would be burnt, improving the monetary policy of the Ethereum network as a whole.

Image source: Shutterstock