Ethereum is struggling to regain ground as it continues to trade below the critical $3,200 level, weighed down by persistent selling pressure and growing macroeconomic uncertainty. Market sentiment has deteriorated significantly in recent weeks, with many analysts increasingly calling for a broader bear market phase.
From a structural perspective, ETH remains below several key technical levels that previously served as support, reinforcing the perception that downside risks are still present and bullish momentum remains fragile.
Beyond price action, on-chain data is beginning to support this cautious outlook. According to a CryptoQuant report from CryptoOnchain, Ethereum network activity has contracted sharply, signaling a significant decline in underlying demand. The 7-day simple moving average (SMA) of active addresses fell to 327,000, which is the lowest figure since May 2025.
This represents a significant pullback from the previous cycle highs and suggests that fewer users are actively interacting with the Ethereum network.
Historically, ETH’s sustained uptrends have been supported by growing network usage and growing participation. The current decline in active addresses indicates a reduction in network utility, often associated with a cooling of investor interest and the exit of short-term participants.
Ethereum Network Activity Signals Cooling Demand
According to the CryptoQuant report, the current decline in active Ethereum addresses represents a sharp decline from the peak of around 483,000 addresses recorded in August. Since this peak, network participation has continued to weaken, highlighting a clear loss of momentum in on-chain activity.
This contraction closely mirrors Ethereum’s market performance during the same period. As active addresses decreased, the price of ETH corrected significantly from a cycle high near $4,800 to the current $3,100 area.
The simultaneous decline in prices and network activity is a critical signal. This suggests a reduction in demand for block space and points to a potential exit from retail traders or short-term participants who typically generate spikes in trading activity during strong bull runs. When fewer users interact with the network, it often reflects less speculative interest and a decrease in transactional demand.
In a healthy and sustainable bull market, rising prices are typically accompanied by increasing network usage, with active addresses tending to increase as adoption and participation increase. The current divergence from this trend indicates a cooling ecosystem rather than an accelerating phase.
For Ethereum to establish a lasting price reversal, this metric will be key to watch. A sustained recovery of active addresses would be one of the first clearest signals that demand is returning and the network is regaining its fundamental strength.
Ethereum Weekly Price Structure Shows Critical Inflection Zone
Ethereum’s weekly chart highlights a market caught between long-term structural support and unresolved downward pressure. After peaking near the $4,800-$5,000 area earlier in the cycle, ETH entered a prolonged correction phase that caused the price to fall sharply. The subsequent rebound from the lows of $1,500 to $1,600 marked a clear recovery, but the rally has so far failed to turn into a sustained uptrend.
Currently, ETH is trading near the $3,150 level, hovering around a key confluence zone. Price interacts with the 100- and 200-week moving averages, which historically act as trend-setting levels. Although ETH has managed to reclaim the long-term moving averages, it continues to struggle to follow them, signaling buyer hesitation at higher prices.
The structure since mid-2024 looks more like a broad consolidation than a decisive breakout. Each attempted rally towards the $4,000-$4,500 range was met with heavy selling pressure, producing lower highs on the weekly time frame. Volume has also declined from previous impulsive advances, suggesting lower conviction behind recent rallies.
From a structural point of view, it remains essential to stay above the $2,800 to $3,000 zone. As long as this zone holds, ETH maintains a constructive low off the 2022 low. However, failure to generate acceptance above moving averages keeps Ethereum vulnerable to extended consolidation or another corrective step before a clearer trend emerges.
Featured image from ChatGPT, chart from TradingView.com
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