The recent dip in Ethereum (ETH) fees indicates a decrease in user demand for transactions. Gas prices have dropped below 1 gWEI, reaching as low as $0.06 for regular transactions. This is the first period of low fees since September 2024, and it reflects a more bearish sentiment for ETH, which is currently trading around $2,700. Basic swaps and other on-chain activities have also become significantly cheaper. This decrease in gas fees has led to an expansion in ETH production, with a weekly distribution of 12,345.53 ETH to validators. However, the slowdown in Ethereum's usage is not limited to the chain itself but also affects its entire Layer 2 ecosystem. Active addresses on all Layer 2 chains have decreased by 24% in the past week. Additionally, there has been an outflow of stablecoins from the Ethereum ecosystem, raising concerns about the future of the altcoin market. Solana has seen increased activity and has surpassed Ethereum in terms of fees generated by related apps. Despite these challenges, Ethereum still maintains high-scale DeFi activity and enough liquidity to support large trades and transactions. Stablecoins like Tether and Circle continue to be the busiest fee producers on the Ethereum network. The current Ethereum activity reflects the recent market capitulation of ETH, with a decrease in open interest and negative funding rates on exchanges like Kraken and Deribit.



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