TLDR
- CryptoQuant said Ethereum could fall to $1,500 if bearish market conditions continue.
- The firm reported that daily active addresses on Ethereum reached an all-time high last month.
- ETH has dropped more than 50% from its recent cycle highs despite rising network activity.
- CryptoQuant said exchange inflows signal stronger selling pressure on ETH compared with Bitcoin.
- The one-year change in Ethereum realized capitalization has turned negative, indicating capital outflows.
Ethereum may face further downside as onchain data shows a widening gap between network usage and price performance. CryptoQuant said ETH could drop to around $1,500 if bearish conditions persist. The firm linked the outlook to rising exchange inflows and weakening capital trends despite record activity.
Ethereum Adoption Rises as Price Weakens
CryptoQuant reported that daily active addresses on Ethereum reached an all-time high last month. The firm said usage surpassed levels recorded during the 2021 bull market. However, ETH has fallen more than 50% from its recent cycle highs.
The firm described this gap as an “adoption paradox” within the Ethereum network. It said rising user growth no longer supports stronger price action as in past cycles. Instead, price trends now diverge from onchain participation metrics.
CryptoQuant also tracked a surge in smart contract activity across decentralized applications. It said internal contract calls reached record highs as decentralized finance and Layer 2 networks expanded. Internal calls occur when smart contracts execute transactions automatically within applications.
“The historical relationship between smart contract activity and ETH price has deteriorated,” CryptoQuant said. It added that earlier cycles showed a clearer positive link between contract activity and price gains. Now, higher transfer counts no longer coincide with rising ETH prices.
Exchange Inflows and Capital Trends Pressure ETH
CryptoQuant stated that exchange inflows offer a clearer signal for the ETH price direction. The firm explained that exchange deposits often indicate potential selling pressure. It said elevated inflows relative to bitcoin suggest stronger relative selling activity.
“The elevated ratio of ETH exchange inflows relative to bitcoin suggests stronger relative selling pressure on ETH,” CryptoQuant said. The firm added that this trend helps explain ETH underperformance against BTC. It said traders move capital toward exchanges when they prepare to sell assets.
Julio Moreno, head of research at CryptoQuant, outlined a downside scenario for ETH. He told The Block that ETH could fall to around $1,500 if the bear market continues. He said that level could appear by late third quarter or early fourth quarter this year.
CryptoQuant also highlighted weakening investment demand within the network. It said the one-year change in Ethereum’s realized capitalization has turned negative. That metric tracks net capital entering or leaving the asset over time.
Moreno said Ethereum needs renewed capital inflows to reverse the trend. “We need to see positive capital inflows and lower exchange inflows for ETH to exit the bear market,” Moreno told The Block. ETH traded at around $2,070 at publication, up about 0.5% over 24 hours.