The average network fee on Ethereum took another hit as the value dropped below the $0.9 level, which the majority of users hoped to hold. The dropping average fee could be a worrying sign that shows the state of the network and the whole industry.
The plunge in usage of the network is in addition to the massive plunge of ETH's value, which is down more than 70% since the ATH reached back in November. Such a strong drop in value caused a massive outflow of funds from the network.
💸 #Ethereum's fees are down to an average of just $0.88 per transaction, due to prices down 75% since the November #AllTimeHigh and utility dramatically falling as a result. July, 2020 was the last time we saw $ETH average fees below the $0.90 threshold. https://t.co/1sKGht0bb4 pic.twitter.com/z1MxTSngJh— Santiment (@santimentfeed) July 10, 2022
With the prices of Ethereum down, the revenue of projects based on the network is also plunging drastically. The DeFi industry, which was one of the main fuels for Ethereum fees and revenue, showed a dramatic fall in the last quarter as the TVL on Ethereum tumbled from $153 billion to $47 billion.
The last time the market saw the average fee of Ethereum at around $0.9 was July 2020, when the price of the second largest cryptocurrency on the market had been moving around the $450 range.
The potential drop to $500 would deal enormous damage to the network's revenue, moving the average fee even lower, which may cause a further drop in the usage of Ethereum and create an additional problem for existing protocols.
As for the market value of Ethereum, the second biggest cryptocurrency is currently trying to gain a foothold above $1,200 which, if it succeeds, will make ETH's recovery run a possibility if the market faces an increase in inflows.
Previously, the Fidelity analyst told his followers that both Bitcoin and Ethereum are highly undervalued and are close to reaching the bottom of the correction, which is confirmed by technical indicators like the Relative Strength Index and others.