Ethereum Plummets 60% as Active Addresses, Fees Decline
2min read Ethereum (ETH) price has continued to decline, falling below $1,800 and marking a nearly 60% drop from its November high. This downward trend is supported by weak fundamental metrics, including a decrease in active addresses, ETF outflows, and a plunge in fees, which collectively suggest a potential crash to $1,000.
On-chain data indicates that the number of active addresses on the Ethereum network has significantly decreased. In January, there were over 575,000 active addresses, but this figure has since dropped to 333,000. This decline suggests that some holders are losing interest or abandoning the network.
Additionally, the Ethereum network's burn rate has continued to drop as the fees generated by the network fall. According to TokenTerminal, the Ethereum network has made only $222 million in fees, a figure that is lower than several other networks, including Uniswap, Solana, Circle, Tron, and Tether. This is a stark contrast to Ethereum's previous dominance in fees.
ETF outflows for Ethereum have also surged, reaching $403 million in March, bringing the cumulative figure to $2.36 billion. In contrast, Bitcoin has seen over $36 billion in inflows since January last year, highlighting the disparity in investor sentiment between the two cryptocurrencies.
Ask Aime: What factors are driving the decline in Ethereum's price?
Analysts have turned bearish on Ethereum's price. Standard Chartered recently lowered its ETH price forecast by 60% to $4,000. This pessimistic outlook is further exacerbated by the current market conditions, which are characterized by extreme fear following the implementation of reciprocal tariffs that have increased recession odds.
A technical analysis of Ethereum’s weekly chart reveals an increasing risk that the coin will continue to fall. The chart shows a triple-top pattern formed between March 11 and December 16 last year, consisting of three peaks and a neckline. The peaks were at $4,045, while the neckline was at $2,130. Ethereum has now plunged below the neckline, validating the bearish thesis. The Average Directional Index (ADX), which measures the strength of a trend, has soared to 30, indicating that the trend is strengthening.
Measuring the distance between the top and the neckline shows that it is about 50%. A similar measurement from the neckline suggests that Ethereum could crash to $1,000, which is about 42% below the current level. However, if Ethereum manages to move above the crucial resistance level at $2,130, the triple-top’s neckline, it could invalidate the bearish forecast and raise the odds of the coin rising to $2,500.
In summary, Ethereum's price decline is supported by weak fundamental metrics and technical indicators. The decrease in active addresses, ETF outflows, and falling fees, combined with the formation of a triple-top pattern on the weekly chart, suggest a potential crash to $1,000. However, a move above the $2,130 resistance level could invalidate this bearish outlook and pave the way for a recovery.
