Gas Price in Ethereum Hits Yearly Low

Gas prices on the Ethereum network have hit a significant low, with the median price dropping to 6.8 gwei on October 8th, 2023. This decline is notable as it represents the lowest gas prices seen this year. The data is sourced from the Dune dashboard, which tracks various metrics within the Ethereum network.

At the time of writing, gas prices have seen a slight increase to 8.2 gwei. However, this marginal rise does not negate the significance of the previous drop. The decline in gas prices has raised concerns and questions about the factors contributing to this trend.

Several factors have contributed to the reduction in gas prices on the Ethereum network. One of the key factors is the decrease in Total Value Locked (TVL) within the decentralized finance (DeFi) sector. Additionally, trading in the non-fungible token (NFT) segment has also slowed down, affecting gas prices. The reduced activity of Telegram bots further adds to the overall decrease in gas prices.

According to the Dune dashboard, the weekly trading volume of NFTs has dropped to its lowest levels since the beginning of the year, hovering around $44.5 million. This decline in NFT trading activity is indicative of the overall slowdown in the Ethereum ecosystem.

The number of active traders over a seven-day period has seen a significant decline, dropping from 172,000 at the start of the year to just 44,500. This sharp decrease in active traders further emphasizes the current challenges facing the Ethereum network.

Trading bots on Telegram, which gained popularity in the second quarter of the year, have also witnessed a substantial decrease in activity compared to the peak levels seen in July.

As of October 12th, the total value of assets locked in the Ethereum ecosystem amounted to $19.8 billion, as reported by DeFi Llama. This figure is approximately 37% lower than the April peak of $31.5 billion and is in line with December 2022 levels.

In early September, Ethereum faced inflationary pressures due to reduced transaction fees. According to Ultra Sound Money, the market supply of Ethereum increased by 31,940 ETH over the last 30 days, resulting in a yearly inflation rate of 0.32%.

While some, like Jeffrey Kendrick of Standard Chartered, predict a bright future for Ethereum with a price projection of $8,000 by the end of 2026, others believe that traders continue to favor Bitcoin over Ethereum, as suggested by analysts at K33 Research. The battle for supremacy in the cryptocurrency market continues, with Ethereum facing its own set of challenges.