Ethereum transaction fees drop 87% as Fusaka upgrade boosts network capacity

Network activity cools as upgrades take hold

Analytics provider Santiment attributed much of the fee reduction to subdued mainnet activity during the summer’s quieter trading environment. With fewer active users competing for Ethereum’s blockspace, congestion eased and processing costs dropped.

Santiment noted transaction costs have decreased considerably since reaching their yearly peak. The firm highlighted that despite Ethereum’s higher price, users now pay significantly less per transaction, with current fees measured at $0.095 compared to $0.72 in April.

While seasonal demand is down, Ethereum’s increased network capacity has also played an important role in reducing fees. The Fusaka upgrade brought higher blob throughput, enabling the blockchain to handle more data with every block and easing congestion further.

In addition, Ethereum’s gas limit was raised to 60 million, increasing the number of transactions processed in each block and further diluting competition for blockspace.

Layer 2 networks, such as Optimism and Arbitrum, have absorbed a significant share of network activity that previously occurred directly on Ethereum’s mainnet. These secondary protocols help reduce demand for mainnet blockspace and thereby ease upward pressure on fees.

Mini dictionary: Fusaka upgrade, a network improvement on Ethereum that increases “blob” data throughput, allowing for greater transaction capacity and helping decrease congestion.

These combined factors have given users a more affordable experience for activities such as token transfers and decentralized finance transactions. Lower transaction costs address one of the platform’s long-standing hurdles to broader adoption, though fee reductions alone do not necessarily signal renewed network growth.

ETH price tests key support and resistance zones

ETH most recently traded near $2,441, marking a 2.2% rise over the previous 24 hours and showing sturdy trading volumes of $12.2 billion. Despite this bounce, weekly performance has cooled, with the token declining 0.6% over the past seven days.

Market analyst Cryptorphic identified $2,365 to $2,380 as an important support zone, stating that ETH has rebounded from this range after a recent dip.

According to the analysis, price is currently testing a broken rising trendline around $2,460. If ETH reclaims this level, a further advance toward the $2,520 to $2,530 resistance area could follow, while failure may result in a return to support.

This technical area remains a focal point for traders anticipating a potential shift in short-term sentiment. The asset’s ability to sustain movements beyond its immediate support and resistance levels may influence near-term outlooks.

Meanwhile, the improved fee environment could help stimulate activity if market participants regain confidence and push for higher transaction volumes in the months ahead.