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Ethereum's Price Stagnates Below $2,000 as Active Addresses Drop 50%

Coin WorldFriday, Apr 4, 2025 7:42 am ET

1min read

Ethereum (ETH) investors have been facing challenges as the price has remained below $2,000 for 25 consecutive days. While many other altcoins have experienced significant rallies, Ethereum's price has stagnated. Four key on-chain metrics from CryptoQuant provide insights into why this is happening.

One of the primary reasons for Ethereum's price stagnation is the declining number of active addresses. The number of active addresses has dropped from around 600,000 to 300,000. This decline indicates a lack of investor interest, which in turn affects capital flows and contributes to the sluggish performance of ETH's price.

Another critical factor is the decline in total fees burnt. Fees burnt incentivize validators or stakers, but a decrease in this metric suggests a pessimistic outlook for the price. The total fees burnt have dropped from 10,000 to less than 100, reflecting the reduced interaction with the Ethereum blockchain. Additionally, the fees burnt per transaction have decreased from nearly $80 to less than $0.1, further indicating a decline in blockchain activity, partly due to competition from other platforms like Solana.

The increase in the total supply of ETH post-Merge is another significant factor. The supply has risen from 120 million to 120.6 million, with an additional 600,000 ETH added to the supply since April 2024. This increase in supply, coupled with a lack of investor interest, has put downward pressure on the price of Ethereum. The worsening macroeconomic conditions and the collapsing price of Bitcoin have also contributed to the bearish outlook for Ethereum.

Ask Aime: What are the underlying reasons for Ethereum's price stagnation?

In summary, the stagnation of Ethereum's price below $2,000 can be attributed to several factors, including a decline in active addresses, a drop in fees burnt, and an increase in the total supply of ETH post-Merge. These fundamentals will need to improve for the outlook on Ethereum's price to become more positive.