Close Menu
ADVERTISE

ETH Network fees drop 30% in a month: Will Ether follow?

Altcoins By
Musk’s Bitcoin Push Lifts All Boats—Can DOGE, ADA, Ride to
Musk’s Bitcoin Push Lifts All Boats—Can DOGE, ADA, Ride to

The key takeaways

  • Ethereum’s activity at the base layer has decreased, fees have dropped and TVL is down, which shows that demand for Ethereum, despite its recent price increase, remains low.

  • The layer-2 network is growing quickly, which helps Ethereum to grow even though base-layer usage has weakened and traders are still cautious.

EtherETH() rose to its highest level in three weeks near $3400 on Tuesday, after disappointing US job market statistics reinforced the expectation that US monetary policies could be less restrictive earlier than expected.

Despite the weekly gain of 11.2%, traders are still concerned that the sluggish Ethereum activity on the network and the limited demand for leverage bullish may limit the short-term gains.

Ranking of blockchains by network fees for seven days, in USD. Source: Nansen

Nansen data showed that Ethereum’s network fees fell by 62% in the 30 days following the date of the report. That is much more than the 22% drop observed for Tron Solana or HyperEVM. 

Nevertheless, some activity stood out. Transactions on Base increased 108% while Polygon registered an 81% rise, indicating continued momentum throughout Ethereum’s layer-2 ecosystem.

Ethereum Fusaka upgrade The lower charges throughout the entire month may be due to changes made on December 3 to enhance rollup efficiency.

ETH perpetual futures eight-hour funding rate. Source: CoinGlass

This Tuesday the annualized funding rate The 9% level for ETH futures reflects a distribution that is fairly equal between the buyers and sellers of leveraged positions. This indicator is usually between 6 and 12 percent to reflect capital costs. Levels above this range indicate a stronger bullish position.

After the US Bureau of Labor Statistics announced that there were 1.85 million job losses in October, it was a defensive move by traders. This is the highest number since 2023. The markets are pricing in an interest rate reduction of 0.25% by the US Federal Reserve for Wednesday. Attention is now focused on the comments made by Fed Chairman Jerome Powell following the Committee’s meeting.

Ethereum’s layer-2 fee growth is offset by the decline in base layer fees

Ether trades at a 32% discount to its previous high, which was $4,597 in August. It’s important to consider the effect on the decentralized applications (DApps) in order to gauge whether the demand for Ethereum is genuinely decreasing.

Ethereum DEX volume (left) and DApps revenues (right). Source: DefiLlama

The volume of Ethereum-based, decentralized exchanges dropped to $13.4 Billion in seven days from $23.6 Billion four weeks ago. Decentralized app revenues also reached their lowest level in five months, $12.3m during the same time period. Since late August, the demand for Ethereum base layer processing is declining.

Ethereum DApps with TVL of at least 500 million dollars. Source: DefiLlama

Pendle and Athena are among the top DApps on Ethereum. Spark, Morpho, Spark, and Spark have all seen a dramatic drop in their TVL. TVL aggregate on Ethereum’s base layer has fallen to $76 Billion from $100 Billion two months prior. Ethereum is still the dominant cryptocurrency with a market share of 68%, while Solana has a less than 10%.

The Ether bulls say that the strong incentives of the layer-2 network for scalability are a sustainable alternative to the heavy load and central coordination needed by other blockchains. Ethereum is poised to capture an important share of future growth Decentralized Finance (DeFi)

Related: US Treasurys lead tokenization wave as CoinShares predicts 2026 growth

US Securities and Exchange Commission Paul Atkins reported said In a FOX interview, it was suggested that the tokenization of US markets could happen in “a couple of years,” Addition of blockchain to the list “huge benefits” Predictability and transparency are two examples. Atkins stated that the US should “embrace this new technology, bring it onshore where it can work under American rules.”

Ethereum’s layer-2 fees continue to increase, despite the fact that the TVL has dropped and the base-layer fees of Ethereum have been sharply reduced. Neither onchain data nor derivatives indicate a significant weakness in ETH’s price dynamics.

This article was written for informational purposes, and not as a legal or investment advisory. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.