Ethereum is facing one of the most bearish outlooks in the market as the altcoin struggles to reclaim the $2,000 level after falling below it on the 5th of February.
On a broader scale, the losses are even more severe.
Ethereum [ETH] has shed nearly 60% of its value since its all-time high in August, when the altcoin came close to crossing the $5,000 threshold. The decline may not be over yet, as recent on-chain and off-chain data point to growing warning signs across the market.
Volume hits a low
On-chain market activity often serves as a key barometer for assessing the utility of a blockchain and its underlying asset.
One important metric in this context is the on-chain trading volume across Decentralized Exchanges (DEXs). This metric tracks how frequently users transact on the network by measuring the cumulative value of buy and sell transactions executed within a given period.
In Ethereum’s case, trading activity has slowed considerably. DEX trading volume over the past 24 hours dropped to roughly $1.02 billion.
The last time volume fell below this level was on the 24th of January. At the time, Ethereum recorded a 24-hour decline of 6.16%, and just a few days later, on the 28th of January, the altcoin dropped nearly 40%, falling from $3,041 to $1,815.
When the price structure is already weak, a slowdown in on-chain activity could further weigh on Ethereum’s price trajectory.
Users are exiting the chain
The decline in trading volume may also reflect a broader drop in user participation across the network.
Data from Artemis showed that Monthly Active Users (MAU) have recorded one of their steepest recent declines as of press time.
Active Users have fallen from 15.3 million in February to roughly 12.7 million at press time.
With around 2.6 million users leaving the network within this period, the shift suggests that many participants have either sold their holdings or are leaving their assets idle without active trading.
However, given Ethereum’s sharp decline from its all-time high and the persistent market weakness since January, the likelihood that many of these users exited their positions remains high.
With fewer participants actively engaging with the network, the available supply in the market may rise relative to demand. This imbalance tends to weigh on price and can limit the chances of a sustained rally without a corresponding increase in buying pressure.
Is demand returning?
So far, the data suggest that demand has yet to recover.
Off-chain indicators tracking Ethereum activity on centralized exchanges—where most investors execute their ETH trades—continue to point to weak accumulation trends.
One key metric supporting this outlook is the Exchange Withdrawing Addresses indicator. This metric tracks the number of addresses moving their ETH from centralized exchanges into private wallets, a behavior typically associated with long-term holding.
At the time of analysis, this number had declined sharply, dropping from 53,382 addresses to just 15,081.
This shift suggests that nearly 40,000 investors who previously withdrew their ETH are now holding their assets on exchange wallets, a trend often associated with increased sell-side pressure.
Further analysis of Exchange Reserves, which track the amount of Ethereum held across centralized exchanges, shows that supply on trading platforms has increased during the same period.
Exchange reserves rose from 15.9 million ETH to roughly 16.1 million ETH, representing an addition of about 168,000 ETH to exchange balances.
At the aforementioned price action, this supply is valued at approximately $334 million.
If a large portion of this supply enters the market through sell orders, it could place additional pressure on Ethereum’s price and further dampen the altcoin’s near-term outlook.
Final Summary
- Ethereum fell nearly 60% from its August all-time high, struggling to reclaim the $2,000 level after its February breakdown.
- DEX trading volume dropped to about $1.02B and Monthly Active Users declined from 15.3M to 12.7M.
