Ethereum’s network activity has taken a notable turn as gas fees plummet to their lowest levels in six months. Despite a modest price uptick over the weekend, average transaction costs on the Ethereum blockchain have dropped significantly—falling to just $1.12 on April 27, according to data from analytics platform Santiment. This shift isn’t just a technical footnote; it could signal broader market momentum, potentially heralding the long-anticipated altcoin season.
The Hidden Signal Behind Low Ethereum Gas Fees
Gas fees are more than just a cost of doing business on Ethereum—they’re a behavioral indicator. When users flock to the network, competition for block space drives fees up. Conversely, when activity cools, fees drop. But these fluctuations often reflect deeper market psychology.
As Santiment observed, traders historically oscillate between two emotional extremes: the belief that crypto is about to “explode” or the conviction that it’s “dead.” These sentiments manifest clearly in transaction fee trends.
👉 Discover how low network congestion could be the perfect setup for the next big move.
Historically, Ethereum gas fees peak near local market tops—when hype and speculative trading surge—and dip to what analysts call “baseline” levels during periods of consolidation or bearish sentiment. The current low fee environment suggests we're in one of those quiet phases. But history shows these lulls often precede explosive rebounds.
From Peak Hype to Quiet Accumulation
Earlier this year, in February, Ethereum gas fees spiked to an eight-month high. What triggered it? A wave of excitement around ERC-404, an experimental token standard blending features of NFTs and fungible tokens. Projects like Pandora (PANDORA) saw explosive growth, drawing massive user engagement and clogging the network with high-value transactions.
Now, the scene has changed. With average fees down nearly 80% from those peaks, the network is wide open—offering cheap transactions and fast confirmations. For developers, traders, and new projects, this creates fertile ground for innovation and deployment without the friction of high costs.
Could This Be the Start of Altcoin Season?
Santiment’s analysis suggests exactly that. Lower fees don’t just mean savings—they often precede increased on-chain activity. When it becomes affordable to interact with DeFi protocols, NFT marketplaces, and Layer 2 solutions, participation rises. That influx can spark a feedback loop: more users → more transactions → rising asset prices → renewed interest.
And signs are already emerging.
According to CoinGecko, Ethereum’s price rose 4.3% last week—a modest but positive signal. More telling was the performance of Ethereum Layer 2 ecosystems:
- Optimism (OP): +11.7%
- Arbitrum (ARB): +3.5%
- Polygon (MATIC): +2.8%
These three occupied three of the top five spots among the top 50 cryptocurrencies by market cap on April 27, indicating strong investor appetite for Ethereum-adjacent assets.
This kind of outperformance is classic early-stage altcoin season behavior. When capital starts rotating out of Bitcoin and blue-chip ETH into smaller-cap, ecosystem-linked tokens, it often marks the beginning of broader market expansion.
Network Activity and Supply Dynamics
While transaction volume has cooled, another metric tells a different story: Ethereum’s circulating supply.
Data from Ultrasound.money reveals that over the past 30 days, 74,458 new ETH were issued through staking rewards, while only 57,516 ETH were burned via fee destruction (EIP-1559). The result? A net inflationary increase of 16,979 ETH—the largest monthly supply growth since the Merge.
This breaks a five-month streak of deflationary issuance, where more ETH was burned than created.
Yet context matters. Since Ethereum’s transition to proof-of-stake on September 15, 2022—commonly known as “The Merge”—over 437,000 ETH have been burned, reflecting sustained usage pressure and fee activity over time. The recent inflation is a blip in a longer-term trend of scarcity enhancement.
Still, rising supply could weigh on price if demand doesn’t pick up. That makes the current lull in gas fees even more critical—it may represent a window of opportunity before renewed demand pushes both prices and fees higher.
👉 See how smart money moves during low-fee cycles—before the crowd catches on.
Core Keywords & SEO Optimization
To align with search intent and boost visibility, key terms naturally integrated throughout this piece include:
- Ethereum gas fees
- Altcoin season
- Ethereum Layer 2
- ERC-404
- The Merge
- Ethereum supply inflation
- Low gas fees
- On-chain activity
These keywords reflect real-time user queries and trending topics in the crypto space, ensuring relevance for readers searching for insights on market cycles, network health, and investment timing.
Frequently Asked Questions (FAQ)
What causes Ethereum gas fees to go down?
Gas fees drop when network demand decreases. Fewer transactions mean less competition for block space. This often happens during market consolidations or bearish periods when speculative activity slows.
Do low gas fees mean a price rally is coming?
Not always—but they can be an early signal. Historically, extended periods of low fees are followed by surges in activity as developers and users return to build and trade. If accompanied by rising investor interest, it can precede an altcoin rally.
How does ERC-404 affect Ethereum gas prices?
ERC-404 combines NFTs and tokens in a novel way, enabling fractional ownership of NFTs. Its experimental nature sparked hype in early 2025, driving up transaction volume and gas fees temporarily due to high user engagement.
Is Ethereum still deflationary?
Not currently. Over the past month, issuance exceeded burns, making Ethereum slightly inflationary. However, since The Merge in 2022, the network has remained broadly deflationary overall due to consistent fee burning.
Why are Layer 2 tokens outperforming?
Lower fees and improved scalability make Layer 2 networks like Arbitrum and Optimism attractive during network lulls. Investors often rotate into these ecosystem plays ahead of broader market rallies.
Can low gas fees trigger an altcoin season?
Indirectly, yes. Cheap transactions lower the barrier to entry for retail users and enable micro-transactions in DeFi and gaming dApps—key drivers of altcoin adoption.
Final Outlook: Quiet Now, Loud Soon?
The data paints a compelling picture: Ethereum is quiet—but not dormant. Low gas fees reflect reduced immediate demand, but also set the stage for renewed activity. With Layer 2 ecosystems gaining traction and investor attention shifting toward niche innovations like ERC-404, the foundation for an altcoin surge appears to be forming.
Historically, the best time to position for a rally is before congestion returns—not after.
👉 Stay ahead of the next surge with real-time data and tools built for volatile markets.
As Santiment noted, markets move in emotional cycles. Right now, we’re in the “it’s dead” phase. But beneath the surface, accumulation is happening. And when sentiment flips, it could happen fast.
For traders and builders alike, this six-month low in gas fees might not be a sign of weakness—but a loading zone for what’s next.