Ethereum, the second-largest cryptocurrency by market capitalization, has witnessed a significant drop in network fees, hitting a six-month low. Data from on-chain intelligence firm Santiment reveals that Ethereum’s gas fees plummeted to as low as $1.12 on April 27, indicating a notable decrease in transaction costs.

This reduction in ETH network fees has led to speculation about a potential rally for altcoins, including ETH. Santiment suggests that the fee decline could signal a market bottom, potentially leading to a turnaround in sentiment for Ethereum and associated altcoins sooner than anticipated.

Traders in the non-fungible token (NFT) market have already started to capitalize on the reduced Ethereum network fees. Over the past 24 hours, ETH has witnessed a 25% increase in NFT sales, totaling more than $6.8 million. This surge in NFT activity indicates that market participants are taking advantage of the lower transaction costs on the ETH network.

In contrast to ETH, Bitcoin has recorded a 20% decline in NFT trading activity over the same period. BTC has sales amounting to $7.1 million. The differing trends between Ethereum and Bitcoin highlight the unique dynamics within the crypto market and the impact of network fees on trading activity.

🤑 #Ethereum's average fee level has dipped to just $1.12 per network transaction, the lowest average cost in a day since October 18th.

Traders historically move between sentimental cycles of feeling that #crypto is going "To the Moon" or feeling that "It Is Dead", which can… pic.twitter.com/8b8rLMLyIf

— Santiment (@santimentfeed) April 28, 2024

Ethereum price continues to decline

Despite the decrease in network fees and increased NFT trading activity, Ethereum’s price has continued to decline. According to CoinMarketCap data, ETH price dropped by more than 4% in the last 24 hours, reaching $3,177.94 as of 2:45 a.m. EST. This downward trend in price contrasts with the potential positive implications of reduced network fees for the broader cryptocurrency market.

The latest drop in Ethereum’s price has pushed its weekly performance into negative territory. Additionally, ETH price has fallen by more than 11% over the past 30 days, reflecting ongoing challenges and volatility within the cryptocurrency market. These price movements underscore the complexity of factors influencing Ethereum’s valuation and its impact on the broader market.

ETH’s influence on the Altcoin market

The declining price of ETH has taken a toll on the altcoin market in recent weeks. As ETH represents a significant portion of the cryptocurrency market, its struggles have contributed to a decline in the collective market capitalization of all cryptocurrencies, excluding Bitcoin.

TradingView data shows that this market cap has plummeted by more than 16% over the past month, highlighting the interconnected nature of cryptocurrency markets and the influence of leading assets like ETH.