Despite people’s expectations, Ethereum’s price has struggled to retest its all-time high, and CryptoQuant explains why.
The price of Ethereum ETH $2 530 24h volatility: 0.4% Market cap: $305.54 B Vol. 24h: $9.99 B , the world’s largest altcoin, is struggling despite a recent broader market recovery. On-chain data shows ETH is experiencing weak network activity, a drop in transaction fees, and inflationary pressure from the Dencun upgrade.
Analysts warn that these factors put downward pressure on Ethereum, hindering its much-anticipated recovery.
Reasons for ETH Drop by CryptoQuant
According to CryptoQuant, several reasons are behind Ethereum’s prolonged market decline. The analytics platform points to the ongoing decline in active addresses as a major factor.
This metric has been falling steadily since January 2025. A decline in users leads to lower demand for the digital asset, slowing overall network activity.
Another concerning issue is Ethereum’s transaction fees, which have hit record lows. On-chain data reveal that the average fees per transaction and block have been at their weakest since the “Ethereum Merge”.
Why Ethereum Is Bleeding Value
“Ethereum’s recent underperformance can be largely attributed to diminished network activity, as evidenced by declining active addresses and reduced transaction fees.” – By @EgyHashX pic.twitter.com/fgQJYCrOIn
— CryptoQuant.com (@cryptoquant_com) April 3, 2025
Since Ethereum relies heavily on fees to power its burn mechanism, this decline has reduced the amount of ETH removed from circulation. Reports indicate that Ethereum’s inflation rate has increased with the burn rate at its lowest point since the Merge, adding more pressure to the price.
Many experts believe introducing the Dencun upgrade in 2024 was supposed to help the Ethereum ecosystem by making transactions cheaper, especially for layer-2 networks.
However, one of the recurring side effects of this update is the reduced burning of ETH. This has led to a higher supply of Ethereum than demand. This situation has worsened Ethereum’s inflationary outlook, contributing to the price downturn.
Another important factor affecting Ethereum’s price is the lack of excitement in the derivatives market. Ethereum Perpetual futures funding rates have stayed neutral since March 31, showing that traders are not betting on a significant price move.
Ethereum Ecosystem Updates
Ethereum’s price has been down 44% year-to-date, and derivative metrics suggest that traders are not optimistic. Metrics show little confidence in a strong short-term recovery, as evident in the premium on Ether futures compared to spot markets.
Ethereum spot ETFs have recorded net outflows of $37 million in the past two weeks, suggesting that institutional interest has weakened. Unlike BTC spot ETFs, ETH has struggled to move investors to push more funds to the cryptocurrency network.
Ethereum Price Outlook and Analysis
Ethereum’s stablecoin holdings are close to an all-time high of $124.5 billion, with $49 billion in total value locked (TVL). This shows a strong potential for ETH adoption, especially as new use cases like structured products and advanced DeFi applications emerge.
Meanwhile, Ethereum’s future price movement will depend on whether network activity picks up again. With low fees, a weak burn rate, and traders staying on the sidelines, ETH remains under pressure. However, sentiment in the crypto market can shift quickly.
Ethereum’s price could see a sharp rebound if investors regain confidence or if positive catalysts emerge. Until then, the market remains in a waiting mode.
CoinMarketCap data shows Ethereum trading at $1,793.58, down by 4.19%. Despite this, it remains the second-largest cryptocurrency, with a 67.24% increase in trading volume over the last 24 hours.
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