Ethereum's User Activity Drops 2025 Low, Price Falls 1.6%

Ethereum, the leading Layer-1 blockchain, is facing significant challenges as user activity on its network has plummeted to the lowest levels seen in 2025. This decline in engagement is evident through key metrics such as daily active addresses and new wallet creations, both of which have hit their lowest points this year. On March 16, the number of active addresses participating in ETH transactions dropped to 361,078, marking the lowest daily count recorded so far this year. This steep decline in active usage is closely tied to transactional demand and fee generation, which are crucial for the network's health.

The reduction in active usage has also led to a decrease in the amount of ETH burned through gas fees, thereby increasing the asset’s inflationary pressure. A weaker deflationary narrative may erode investor confidence, as the network's ability to maintain its value comes into question. Additionally, new wallet creation has also dropped sharply, with only 86,539 new ETH addresses created on Sunday, the lowest this year. This trend reflects declining speculative interest and reduced organic onboarding to the Ethereum network, further highlighting the broader cooling in user appetite for Ethereum.

With on-chain activity declining, Ethereum’s supply is shifting toward inflation. Over the past month, over 71,000 ETH, worth $135 million, was added to the circulating supply, surpassing 120 million ETH. The decrease in transactions has led to fewer fees being burned, weakening Ethereum’s deflationary mechanism. Without strong demand to counter the increased issuance, the surplus supply is creating consistent downward pressure on ETH’s price. This trend is raising investor concerns about the network’s long-term value.

Ethereum’s price outlook remains bearish, with the cryptocurrency struggling to regain momentum. At press time, ETH was trading around $1,894 after a 1.6% daily dip. The Relative Strength Index (RSI) remained below 40, suggesting persistent bearish sentiment and weak buying pressure. The On-Balance Volume (OBV) also declined sharply, reinforcing the lack of meaningful accumulation. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator was attempting a bullish crossover; however, it remains deep in negative territory. This suggests that any recovery might be short-lived unless supported by stronger market conditions.

Following the early March sell-off, Ethereum’s price action has been mostly sideways, with temporary stability just above $1,850. If bulls do not reclaim the $2,000 level soon, Ethereum could face further declines. Additionally, muted broader market sentiment and weak on-chain activity may continue to weigh on its price movement. The combination of these factors raises questions about Ethereum’s ability to maintain its dominance in the face of growing competition from faster and cheaper blockchain alternatives.