Etherium fees drop to $5 amid weakening network activity

Last week, etherium-address activity reached its highest level since February 20. The average daily number of transactions on the blockchain exceeded 1.342 million.

However, network activity began to drop as early as May 14. According to BitinfoCharts, the average daily number of transactions on etherium collapsed to 1.089 million earlier this week.

A sharp weakening in demand for sending funds led to a drop in transaction fees. Fees fell to $5 on May 16, the lowest since last July.

The network’s underlying asset ether (ETH) started the new week with a slight correction, but it is still trading just above $2000.

Trader Ali Martinez estimates that ETH is unlikely to break above $2200 in the coming days.

Strong resistance is expected in this area, the analyst believes. At roughly this value, 3.8 million ether was previously purchased by 477,000 addresses. Accordingly, as the altcoin approaches this mark, the pressure will intensify, and sales will resume.

At the same time, a strong pullback is also unlikely because whales were buying ether late last week when it fell below $2,000.

According to Santiment, the network’s largest addresses realized 2,596 transactions of $1 million or more last Thursday, the strongest whale swim since January.

Typically, large ETH holders enter the market when the coin bottoms out, the researchers pointed out.