- Ethereum fees plunged 70% post-gas limit increase, potentially boosting network activity as lower costs historically correlate with usage growth.
- Exchange reserves fell by 900,000 ETH ($2.3B) in 10 days, echoing patterns seen before previous price rallies of 35%.
Ethereum’s network fees have fallen to their lowest levels since late 2022, dropping roughly 70% over seven days. Data from blockchain analytics platforms shows daily fees now averaging $7.5 million, down from $23 million in early June.
The reduction follows a protocol adjustment that increased the gas limit per block, easing congestion. This change allows more transactions to process simultaneously, reducing competition among users to bid up fees.
Ethereum fees dropped by over 70% this week, largely due to the gas limit increase that was implemented, making transactions cheaper. pic.twitter.com/DrBA0KLyU6
— IntoTheBlock (@intotheblock) February 14, 2025
The relationship between lower fees and network activity has precedent. In 2021 and mid-2023, similar fee declines coincided with rises in daily transactions and active wallet addresses.
ETHNews analysts suggest reduced costs could encourage developers to deploy decentralized applications and users to interact more frequently with existing ones. Whether this leads to durable growth rather than temporary spikes remains uncertain.
Meanwhile, Ethereum reserves on centralized exchanges have decreased sharply. Approximately 900,000 ETH—worth $2.3 billion—left exchange wallets in 10 days, marking the steepest outflow since October 2023.
Reduced exchange liquidity often correlates with fewer sell orders, as investors transfer assets to private wallets for long-term storage. Historical patterns show such withdrawals preceded price jumps: A comparable reserve drop in late 2023 preceded a 35% ETH price gain within eight weeks.
More than 900,000 #Ethereum $ETH have been withdrawn from exchanges in the past 10 days, signaling increased accumulation and reduced sell pressure! pic.twitter.com/8Afn6M76Rx
— Ali (@ali_charts) February 14, 2025
Ethereum has faced consistent resistance near $2,800, failing to close above this level despite accumulation patterns suggesting some investors are buying at lower prices. The Relative Strength Index (RSI) sits at 39.34, indicating neither oversold nor overbought conditions.
On-Balance Volume (OBV), which tracks buying and selling pressure, shows muted momentum. For prices to advance decisively, analysts note ETH must breach $2,900 with higher trading volumes. Absent this, the asset risks retesting support near $2,500.
While Bitcoin and Solana have outperformed Ethereum in price appreciation this year, shifting on-chain conditions suggest ETH’s trajectory could diverge. Lower fees may remove barriers to network participation, while tightening exchange supplies create conditions for price appreciation if demand rebounds.
