Ethereum’s Gas Fees Decrease due to Decreasing Transaction Volume

The Ethereum network traders are currently faced with an agathokakological. At one end, the existing investors can enjoy smaller gas fee transactions on the network. On the other hand, the decline in gas fees is the outcome of the decreasing trading volume on the network that has reached dangerously low levels recently.

At present, the whole cryptocurrency market is going through a bear market, printing red candles since the start of the year start. The ongoing market decline has also affected the two top currencies of the market called, Bitcoin and Ethereum. Recently, the gas fees on the Ethereum network started to drop beyond comparison, which suggests that the network is losing its active users base rapidly.

Is Ethereum Network Losing Active Users?

As per the Santiment analytics, the Ethereum network is currently indicating a continuous trend of a declining graph of the gas fee transactions. The report also pointed out the correlation between the DAI velocity token and the Ethereum gas fee crash. The analysts at Santiment claimed that the gas fee decline points towards the strengthening of the fear in the cryptocurrency market.

The on-chain analysis report further postulated that the amount of active users from the network is decreasing by the day, and the network can suffer from a temporary stagnation state. The report also suggested that the Ethereum network can be in a state of hibernation, as indicated by its performance chart in the pairing with the DAI token.

Santiment analysts used the examples from past behaviors of DAI velocity and Ethereum token market value. The report suggests that DAI stablecoin can be quoted as a good indicator of the performance of the Ethereum blockchain. The report also postulated that the market value of DAI tokens has always decreased when Ethereum network activity is slowed down.

On the other hand, the analysts at Santiment also claim that both tokens seem to have entered a state of pre-mature hibernation. Hibernation is a biological process for polar bears that sleep through the winter months to survive the harsh weather conditions. Likewise, Santiment observers claim that the Ethereum network is in a state of temporary sleep that will restore after a while.

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