Last year, Ethereum gas fees reached record highs during the NFT hype and multiple bull markets. Primarily, this was due to unprecedented high activity on the Ethereum network. Essentially, the leading smart contracts platform offered everything for everyone, DeFi, NFT, Metaverse, stablecoin etc. Obviously, 2022 did not start out so high for cryptocurrencies as we are still in a bear market that initially started out in early January. With that, recent data suggests that the demand for Ethereum network has significantly dropped. Perhaps, this is mostly due to the bar market, but once again, it could be Do Kwon’s fault. But, one man’s lost is another man’s gain, so if you need to use the Ethereum network, now is the time.
Exchange Ethereum to PayPal Instantly on HiExchange
No KYC
Ethereum Network Activity
According to a leading market intelligence firm, Ethereum (ETH) gas fees have fell down significantly in recent days. Comparatively, the gas fees are as low as the market crash occurring in May 2021.
In a new report, Santiment pointed out that the diminished gas fees on the Ethereum network is indicating a serious lack of interest. The demand for the leading smart contracts platform has decreased significantly.
“Ethereum fees are so low [in the] last days. We could even notice they’ve been that low before previous bottoms. Low fees mean very little activity, no one is interested to do anything.”
While the Fear/Greed Index is currently indicating extreme fear in the market, the Ethereum network activity has suffered very much from the uncertainty.
Ethereum gas fees also had a massive drop in March 2022. For the most part, that decline was caused by a slow-down in NFT sales.
Dai
Interestingly, the analytics firm is also looking at Dai, an algorithmic stablecoin that operates on the Ethereum network. According to the firm, Dai money velocity has been a solid indicator for interest in using Ethereum. Basically, velocity is a measure of how quickly money is circulating in the crypto economy. In that regard, the low Dai money velocity is also depressed which signifies less demand for the second largest cryptocurrency by market cap.
“It looks like velocity (a measure of how quickly money is circulating in the crypto economy) has always [increased] when we went to the top. Quite low now. What these two charts [are] showing together is hibernation. It happens typically in winter. Bears sleeping in winter. Waiting for a trigger…”
The low gas fees accompanied by Dai’s money velocity both indicate “stagnancy” and “fear” among market participants according to Santiment.
However, Dai money velocity going down can also be an indication of low interest in algorithmic stablecoins. The Terra USD failure can potentially bring down a hellfire of regulations upon algorithmic stablecoins. In the meantime, investors seem to be moving away from Dai and other algorithmic wizardry.
Ethereum is currently trading at $1,900 which is down 8.50% from its seven-day high of $2.070.
HiExchange
HiExchange is a decentralized online platform to exchange your cryptocurrencies and e-currencies. We utilize an automated system to determine the best exchange rates at any moment. Furthermore, HiExchange does not require KYC or a sign-up process. All Transactions are Backed by 24/7 customer support.
To learn how to exchange your cryptocurrencies to PayPal you can read our instructional article.
For more instructional content, you can always visit HiExchange Blog
