Gas fees on the Ethereum network have been declining since March 2024, but last week, they hit a level not seen in the past five years.

Data on the crypto analytics platform Dune shows that the median Ethereum gas fee fell below 2 gwei last week for the first time since 2020.

Median Ethereum Fees Plummet

Since August 3, the median Ethereum gas fee has been falling below 2 gwei. Although the figure has recorded subsequent spikes, those upticks have only been momentary as the fees eventually return below 10 gwei.

Earlier Friday, the median gas fee was at 1.4 gwei and even went as low as 1.1 gwei before climbing to 1.9 gwei at the time of writing. Notably, the real-time gas price also hovered around 1.93 gwei at the time of publication.

The plunge in real-time and median Ethereum gas prices can be attributed to several factors, including investor sentiment, a general decline in the broader crypto market, and the Dencun upgrade, which significantly slashed Ethereum transaction fees. Gas fees on the network usually skyrocket when the market rallies and excitement is high but return to normal levels when investor sentiment turns negative.

About six months ago, Ethereum gas fees surged to a level not seen since May 2023 as the market buzzed with excitement about the launch of spot Bitcoin exchange-traded funds in the United States. Users paid as high as 70 gwei per transaction. Ether (ETH) rallied to the $4,000 level at the time before tumbling alongside the broader crypto market.

ETH Down 3% Daily

The decline in Ethereum’s median gas fees also coincides with ETH’s negative trajectory in the past week. Data from CoinMarketCap shows ETH trading at $2,560 at the time of writing, down 1.75% in the past seven days and 3.3% in the past 24 hours.

A tweet from on-chain analyst Ali Martinez identified the $2,300 $2,380 region as a critical support zone for ETH if the downward trend persists because 1.62 million addresses bought more than 50 million ETH at that level. Notably, data from IntoTheBlock shows that over 90% of addresses that bought ETH between $2,220 and $3,008 are currently in profit.

Meanwhile, as market experts stipulated in a previous analysis, the drop in gas fees could signal the onset of an altcoin rally.