Ethereum Network Sees 62% Drop In Fees: Is ETH Price At Risk?
Ethereum’s base layer demand softened in November, but ETH’s underlying price supports and strong layer-2 growth show the network still has momentum despite a drop in fees and TVL.
Ethereum’s base layer activity has cooled, with fees and TVL dropping, showing slower demand despite the recent price recovery.
Layer-2 networks are growing rapidly, helping to support Ethereum even as base layer usage weakens and traders remain cautious.
Ether (ETH) rallied to a three-week high near $3,400 on Tuesday after weak United States job market data reinforced expectations that US monetary policy could become less restrictive sooner than previously thought.
Even with the 11.2% weekly gains, traders still worry that sluggish Ethereum network activity and limited demand for bullish leverage may curb the short-term upside.
Nansen data shows that Ethereum’s 30-day network fees dropped by 62%, a far deeper pullback than the roughly 22% decline observed on Tron, Solana and HyperEVM during the same window.
Some activity, however, stood out: transactions on Base rose 108%, while Polygon recorded an 81% increase, suggesting continued momentum across Ethereum’s expanding layer-2 ecosystem.
The Ethereum Fusaka upgrade on Dec. 3 introduced changes designed to improve rollup efficiency, which may have contributed to the lower network fees noted throughout the month.
On Tuesday, the annualized funding rate for ETH perpetual futures held near 9%, reflecting a fairly even distribution of leveraged positions between buyers (longs) and sellers (shorts). Under normal market conditions, this indicator tends to oscillate between 6% and 12% to account for capital costs; levels above that range usually signal stronger bullish positioning.
Traders turned more defensive after the US Bureau of Labor Statistics reported 1.85 million layoffs in October, the highest figure since 2023. Markets are now pricing in a 0.25% interest rate cut by the US Federal Reserve on Wednesday, while attention shifts to Fed Chair Jerome Powell’s comments following the Committee meeting.
Source: CoinTelegraph
