Transaction costs on the Ethereum network have dropped to the lowest level in five years as the amount of activity on the blockchain is in a lull, according to the onchain analytics platform Santiment.

Ethereum network fees are now around $0.168 per transaction and the reduction in fees coincides with fewer people sending Ether (ETH) and interacting with smart contracts, Santiment marketing director Brian Quinlivan said in an April 17 blog post.

“When many people are using Ethereum, users bid higher fees to get their transactions confirmed faster This drives the average costs up,” Quinlivan said.

“When fewer people are transacting, like we see now, users don’t need to bid much. As a result, the average fee drops,” he explained. “It’s essentially a supply and demand system.”

Source: Santiment

Quinlivan said that, from a trading perspective, low fees can preclude a price rebound, still, he added that traders appear to be patiently waiting for the global economic uncertainty to pass before scaling up their usual frequency of Ether and altcoin transactions.

Traditional and crypto markets tanked after US President Trump’s sweeping tariffs were announced on April 2. Many assets haven’t recovered to the same level as before their unveiling, despite tariff exemptions and a 90-day pause for most countries.

ETH has fallen over 12.5% in the past 14 days and has traded flat over the past 24 hours, hovering just under $1,600, according to CoinGecko.

“We can visibly see the increased sensitivity toward Ethereum discussions and tariff/economy news as prices have really threatened long-time support levels,” Quinlivan said.

“The more the retail community leans away from an asset, especially one with still thriving development, the higher the likelihood of an eventual surprise rebound with little resistance,” he added.  

Pectra upgrade on the way

After delays due to configuration issues and an unknown attacker causing headaches during the Holesky and Sepolia testnet activations, the Pectra upgrade for the Ethereum network is now scheduled to go live on the mainnet on May 7.

Phase one is expected to double the layer-2 blob capacity from three to six, reduce transaction fees and network congestion and allow fees to be paid in stablecoins like USDC (USDC) and DAI (DAI).

Related: Ethereum devs prepare final Pectra test before mainnet launch

The maximum staking limit will also be increased from 32 ETH to 2,048 ETH.

The second phase of Pectra is expected in late 2025 or early 2026 and will introduce a new data structure to enhance data storage efficiency and a system that improves scalability by enabling nodes to verify transaction data without storing the entire data set.

The Pectra fork follows the network’s Dencun upgrade in March 2024, which slashed transaction fees for layer-2 networks and improved the economics of Ethereum rollups.

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A US federal judge has agreed to pause a lawsuit filed by 18 state attorneys general and the crypto lobby group DeFi Education Fund against the Securities and Exchange Commission after all parties said new SEC leadership could make the action moot.

Kentucky District Court Judge Gregory Van Tatenhove ordered a 60-day stay on the case on April 16, noting a mid-March filing from the SEC that “this case could potentially be resolved” due to a leadership transition at the regulator.

He added that the parties must file a joint status report within 30 days.

Paul Atkins, a Wall Street adviser who has held board positions with crypto advocacy groups, was sworn in as the new SEC chair earlier this month, replacing acting chair Mark Uyeda and taking over from Gary Gensler.

The 18 attorneys general, all hailing from Republican states, filed the lawsuit with the DeFi Education Fund against the securities regulator in November, alleging that the SEC exceeded its authority when targeting crypto exchanges with lawsuits, accusing the regulator and then-chair Gensler of “gross government overreach.” 

The plaintiffs included attorneys general from Nebraska, Tennessee, Wyoming, Kentucky, West Virginia, Iowa, Texas, Mississippi, Ohio, Montana, Indiana, Oklahoma and Florida, among others.

“Without Congressional authorization, the SEC has sought to unilaterally wrest regulatory authority away from the States through an ongoing series of enforcement actions,” the lawsuit stated. 

Screenshot from filing ordering pause of proceedings. Source: CourtListener

DeFi groups drop case against IRS over killed broker rule

Meanwhile, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dropped their lawsuit against the Internal Revenue Service on April 16. 

“The parties hereby stipulate to voluntary dismissal of this action without prejudice because the case has become moot,” stated the filing. 

The lawsuit, filed in December, argued that the so-called IRS DeFi broker rule went beyond the agency’s authority and was unconstitutional.

Related: NY attorney general urges Congress to keep pensions crypto-free — ‘No intrinsic value’

On April 11, President Donald Trump signed a bill to revoke the rule that would have required DeFi protocols to report transactions to the IRS.

It comes as the SEC has paused or dropped several high-profile lawsuits against crypto companies this year under its new leadership.

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The tone of Bitcoin-related social media posts has flipped to bullish according to crypto analytics platform Santiment, despite Bitcoin continuing to swing around $85,000.

“Traders are showing optimism that BTC can regain $90K, which will likely be dependent on tariff and global economy news as the week progresses,” Santiment said in an April 16 X post. The last time Bitcoin (BTC) traded above $90,000 was March 6.

Traders regaining confidence in Bitcoin

Santiment’s social media tracker, which measures how social media users feel about crypto based on the tone of their posts, moved into “bullish territory” on April 16 with a score of 1.973. 

Before that, it was neutral, with a score below 1.606, as social media users were unsure about where Bitcoin’s price was headed as it “has been repeatedly crossing above and below $85K,” Santiment added.

Bitcoin tapped as high as $86,000 on April 15 before retracing down to $83,000 the following day. Bitcoin is trading at $84,390 at the time of publication, according to CoinMarketCap.

Bitcoin is up 2.73% over the past seven days. Source: CoinMarketCap

If Bitcoin reclaims the $85,000 price level, approximately $254 million in short positions will be at risk of liquidation, according to CoinGlass.

In the past 24 hours, several popular crypto accounts on X have shared bullish comments on Bitcoin. Samson Mow’s firm Jan3 said that Bitcoin hitting $500,000 “isn’t crazy.”

Crypto trader “Ted” said, “Global money supply is going up, and eventually, this liquidity will go into Bitcoin. Just wait and watch.”

Meanwhile, crypto trader Titan of Crypto said that “according to Dow Theory, BTC remains in an uptrend, consistently printing higher highs and higher lows.”

Related: Bitcoin’s wide price range to continue, no longer a ’long only’ bet — Analyst

Other crypto sentiment trackers are not flashing as bullish, however. The Crypto Fear & Greed Index, which measures overall market sentiment, reads a “Fear” score of 30 out of 100.

It comes after the crypto market posted its weakest first quarter performance in years. 

Bitcoin and Ether (ETH), the two largest cryptocurrencies by market capitalization, saw price declines of 11.82% and 45.41%, respectively, over Q1 2025 — a quarter that has historically seen strong results for both assets. 

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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.