Ethereum (ETH) has recently experienced a notable decline, with its price dipping below the $2,850 mark amid a broader market downturn. This downward trend is accompanied by a significant reduction in network activity, raising concerns about the platform’s current state and future trajectory.
Plummeting Network Activity Signals Reduced Demand
On-chain data reveals a sharp contraction in Ethereum’s network activity. The 7-day Simple Moving Average (SMA) of active addresses has fallen to 327,000, marking a 32% decrease from August’s peak of 483,000 and the lowest level since May 2025. This decline in active users signals reduced network demand and cooling investor interest, historically correlated with bearish trends. Both price and network activity have fallen simultaneously, indicating diminished speculative participation and a lack of fundamental strength. For a sustained recovery, Ethereum needs a revival in active addresses to signal returning demand and ecosystem health.
Institutional Movements and Market Sentiment
Institutional behavior further reflects the current market sentiment. Spot Ethereum ETFs have seen significant outflows, with nearly $225 million exiting these funds recently. This trend suggests that institutional investors are reducing their exposure to Ethereum, possibly due to renewed equity volatility and unclear global monetary policies. Such movements indicate a cautious stance among large-scale investors, contributing to the overall bearish outlook.
Technical Indicators and Future Outlook
From a technical perspective, Ethereum’s price action remains under pressure. The cryptocurrency is trading below its 100-hour simple moving average, with resistance levels forming around $2,980 and $3,050. Failure to reclaim these levels could expose ETH to further declines, with potential support at $2,800. The MACD on ETH/USD continues to gain momentum in negative territory, and the RSI sits below 50, indicating that sellers remain in control. These indicators suggest that Ethereum may face continued challenges in the near term.
Conclusion
Ethereum’s recent price decline below $2,850, coupled with a significant drop in network activity, underscores the challenges facing the cryptocurrency. The reduction in active addresses and institutional outflows reflect a cooling demand and cautious market sentiment. For Ethereum to regain its footing, a revival in network engagement and a shift in investor confidence are essential. Monitoring these on-chain metrics and market behaviors will be crucial in assessing Ethereum’s potential for recovery in the coming months.
