Ethereum Gas Fees Hit 5-Year Low — Will May 7 Pectra Upgrade Flip the Market Bullish?

A sharp decline in network activity is shown by the fact that Ethereum transaction prices have fallen to their lowest points in five years. With the average cost per transaction dropping to only $0.168, many traders are holding off on making big movements until macroeconomic uncertainty subsides. While quiet periods like these can suggest reduced interest, they’ve also historically preceded sharp rebounds, especially when strong network development continues behind the scenes.

Ethereum Gas Fees Plunge to Just $0.168: Lowest Since 2020

According to blockchain analytics firm Santiment, Ethereum transaction prices are currently significantly declining. Ethereum gas fees have dropped to about $0.168 per transaction, the lowest since 2020, according to research published by Santiment on April 17. The reason? Fewer people are sending ETH or interacting with smart contracts. “It’s essentially a supply and demand system,” said Santiment’s Brian Quinlivan. “When network activity drops, users don’t need to bid higher for transactions to go through.”

While this may be welcome news for casual users, it also highlights a broader lull in market participation. Quinlivan noted that historically, low-fee periods can preclude a price rebound, but they often mark a buildup phase where traders lie in wait for stronger signals from global markets.

Ethereum’s Pectra Upgrade Set to Revive the Network Amid Economic Tensions

There is a strong correlation between a decline in Ethereum activity and overall economic uncertainty. Both traditional and cryptocurrency markets suffered when U.S. President Donald Trump announced hefty tariffs on April 2. Ethereum is currently trading flat at just under $1,600, down more than 12.5% over the last two weeks. However, it hasn’t been able to recover its former levels. Ethereum transaction prices reflect the broader market slowdown and reduced user activity.

This price drop coincides with a surge in economic anxiety among retail investors. “We can visibly see the increased sensitivity toward Ethereum discussions and tariff/economy news as prices have threatened long-time support levels,” Quinlivan said.

BREAKING: Ethereum fees are at a 5-year low, with transactions currently costing just $0.168. This is the cheapest daily cost of making $ETH transfers since May 2, 2020. We briefly break this down in our latest insight. https://t.co/fg5CfRgsHn pic.twitter.com/QlLwyzdm1F

— Santiment (@santimentfeed) April 16, 2025

The long-awaited Pectra upgrade is set to go live on May 7, bringing major improvements. Phase one will double layer-2 blob capacity, cut transaction fees, and even allow fees to be paid in stablecoins like USDC and DAI. In addition, the staking cap will be increased from 32 ETH to 2,048 ETH. This is anticipated to encourage greater institutional involvement. Advanced scalability and storage advancements will be introduced in phase two. Moreover, this is expected to occur in late 2025 or early 2026, opening the door for even wider adoption.

Looking Forward: Can Low Activity Spark a Big Move?

Despite the current slowdown in Ethereum activity, the network’s development is anything but stagnant. Many in the industry think Ethereum is setting the stage for its next significant growth phase, with the impending Pectra upgrade set to address congestion and boost economics. Even if some traders stay out of the market, historically, these quiet times have prepared the ground for strong rallies, particularly when supported by technological advancements.

What’s Next: Is This the Calm Before the Surge in Ethereum Transaction Prices?

Ethereum’s sharp decline in transaction fees highlights a temporary market cooldown—but not necessarily weakness. As the broader economic landscape stabilizes and the Pectra upgrade unfolds, Ethereum could be quietly building strength. With fees at a five-year low and major protocol enhancements on the way, the stage may be set for ETH to surprise doubters. For now, investors should watch closely because the calm might not last long.

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