Ethereum is struggling to regain traction as it continues to trade below the critical $3,200 level due to ongoing selling pressure and increasing macro uncertainty. Market sentiment has deteriorated noticeably in recent weeks, with many analysts increasingly calling for a broader bear market.
From a structural perspective, ETH remained below several key technical levels that previously served as support, reinforcing the perception that downside risks still exist and bullish momentum is fragile.
In addition to price action, on-chain data is starting to confirm this cautious outlook. According to CryptoOnchain's CryptoQuant report, Ethereum's network activity has contracted sharply, signaling a meaningful decline in underlying demand. The 7-day simple moving average (SMA) of active addresses fell to 327,000, the lowest since May 2025.
This represents a significant pullback from previous cycle highs and indicates that fewer users are actively interacting with the Ethereum network.
Historically, ETH’s continued bullish trend has been supported by expanding network usage and increased participation. A decline in currently active addresses indicates a decline in network utility, which is often associated with cooling investor interest and the exodus of short-term participants.
Ethereum Network Activity Signals Cooling Demand
According to a CryptoQuant report, the current decline in Ethereum active addresses represents a sharp decline from the peak of approximately 483,000 addresses recorded in August. Since that peak, network participation has steadily weakened, indicating a clear loss of momentum for on-chain activity.
This contraction closely mirrored Ethereum’s market performance over the same period. As active addresses decline, the price of ETH has corrected significantly, falling from a cycle high near $4,800 to the current $3,100 level.
A simultaneous drop in price and network activity is an important signal. This suggests a decline in demand for block space and a potential exodus of retail traders or short-term participants who typically drive surges in trading activity during bullish phases. Fewer users interacting with a network often reflects lower speculative interest and lower transaction demand.
In a healthy, sustainable bull market, rising prices are typically accompanied by greater network usage, which tends to drive higher active addresses as adoption and engagement increase. Current differences from that pattern indicate a cooling ecosystem rather than an accelerating phase.
Observing this metric is essential for Ethereum to establish a durable price reversal. A continued recovery in active addresses will be one of the clearest early signs that demand is recovering and the network is regaining its fundamental strength.
Ethereum weekly price structure shows important inflection points
Ethereum’s weekly chart highlights the market between long-term structural support and unresolved downward pressure. ETH peaked around $4,800-$5,000 early in the cycle and then entered a prolonged correction phase, which saw its price decline sharply. It has since made a clear recovery, bouncing off the lows of $1,500-$1,600, but so far the rally has failed to turn into a sustained bullish trend.
Currently, ETH is trading near the $3,150 level, centered around a major confluence. Prices are interacting with the 100- and 200-week moving averages, which have historically played a pivotal role in defining trends. ETH has regained its long-term moving average, but continues to struggle to track it above it, indicating buyer hesitation at higher prices.
The structure after mid-2024 resembles a broad consolidation rather than a decisive breakout. Each rally attempt towards the $4,000-$4,500 range was met with strong selling pressure, pushing weekly highs lower. Trading volume has also declined compared to previous impulsive gains, suggesting less confidence in a recent rebound.
From a structural perspective, holding above the $2,800-$3,000 area remains important. As long as this area holds, ETH will maintain constructive highs and lows relative to the 2022 bottom. However, failure to build acceptance above the moving average leaves Ethereum vulnerable to an extended consolidation or another correction leg before a clearer trend emerges.
Featured image from ChatGPT, chart from TradingView.com
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