Buy signal for Ethereum as gas fees drop to 6-month low

Ethereum (ETH) gas fees dropped to $1.12 per transaction on April 27, a level previously visited on October 18. This could hint at a historical buy signal as cryptocurrency analysts point out gas fees as bottom and top indicators.

In particular, the leading Santiment analyst Brian Q shared an insight on the platform, studying gas fees’ correlation to price. ETH was trading at $3,300 per token by press time.

“Traders historically move between sentimental cycles of feeling that crypto is going “To the Moon” or feeling that “It Is Dead”, which can be observed through transaction fees. These fees will tend to peak (and sometimes diverge) around price tops, and go back to its resting state around price bottoms.”

Ethereum price and average fees (USD). Source: Santiment/BrianQ

Additionally, the DTCC listed Franklin Templeton’s Ethereum spot ETF, sparking a price surge for ETH this weekend.

Bitcoin recently reached an all-time high above $100 in average network fees, a peak of bullish sentiment with the halving. However, fees are back to lower levels as bearish sentiment started dominating investors’ minds.

A recent “important notice” by the DTCC could be the cause for this shift, as reported by Finbold on April 27. The financial entity will no longer recognize the collateral value for cryptocurrency-based ETFs, threatening a massive sell-off from institutional investors. This can potentially affect expectations regarding the Ethereum spot ETF.

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