Despite being considered extremely expensive, the Ethereum blockchain has remained one of the top networks in the dynamic world of cryptocurrencies. However, the leading blockchain has undergone a major shift as its overall transaction fees plummeted significantly to levels not seen in years.

While the crypto sector is shaken by volatility, Ethereum has taken a hit due to the recent developments regarding the network’s overall transaction fees. Over time, ETH’s gas fees have hindered users’ activity because of the high cost, making it difficult to use.

Recent reports from Crypto Miners, an affiliate of Binance, reveal that Ethereum network usage has slowed down, indicating subdued demand for block space. While the lower fees reflect diminishing demand, it also implies slowing momentum across the ETH ecosystem.

Crypto Miners stated that ETH’s transaction fees have dropped to their lowest level since 2020, marking a four-year low. This drop in transaction fees coincides with a decrease in on-chain activity and indications that ecosystem-wide congestion is abating. The development could impact user engagement, DeFi activity, and NFT transactions, especially validators relying on the blockchain.

Using data from IntoTheBlock, a market intelligence and on-chain platform, Crypto Miners highlighted that the fees decreased by around 60% in the first quarter of 2025, dropping to just $208 million by April 4. 

According to the platform, a notable factor in the sharp drop is the emergence of Layer-2 solutions, particularly Base, and the Dencun update, which massively lowered the cost of scaling layers. Presently, the Layer 2 pack is now being led by Base alone, which processes 80+ Transaction Per Second (TPS), cementing its position in the space.

During this period of weak network demand, Ethereum’s price has also plummeted drastically to previous support levels. As reported by Crypto Miners, the altcoin‘s price fell by about 45% in Q1 of 2025, marking its worst-ever first-quarter performance since 2022. 

The ETH/BTC pair further displays the weak performance, dropping to a 5-year low. However, large investors, often referred to as whales, are not deterred and have gathered ETH below the $1,800 level in a resounding show of support.

As volatility intensifies, an on-chain analyst named MAC_D has identified crucial price levels for ETH. In the quick-take post on the CrytoQuant platform, the expert highlighted that Ethereum holders’ average cost basis (realized price) is positioned at $2,200. From this, it would appear that most ETH holders are currently losing money.

Meanwhile, the average cost basis of whales holding more than 100,000 ETH is $1,290, which is the next major support level for the altcoin. Should Ethereum drop below this level, MAC_D believes it might not fall below $870. During the Luna crisis in June 2022, this level held firm, forming a low for ETH and signaling a rebound.

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