The price of ETH cannot rise sustainably if the downward trend in network activity continues.
Ethereum’s daily active address count continues to decline as it has continued a decline in user participation for several weeks. The decrease implies that fewer users are interacting with smart contracts, dApps and transfers, indicating lighter engagement within the network.
The number of unique addresses sending or receiving ETH daily has fallen dramatically, from about 480,000 in mid-August to nearly 363,000 as of October 26. This 24% shrinkage is not just a superficial dip in the chain.
ETH network goes silent
Active address trends have historically been closely tied to price direction and have served as a proxy for network demand, user presence, and capital flow. And this time, the price is following that deterioration, evidenced by ETH’s decline from the upper $4,800 level to the $3,900 region during the exact same window.
The seven-day moving average of active addresses supports this downtrend even more convincingly by cutting out the daily noise and providing a cleaner structural reading. This too has fallen, from the 480,000 range to around 370,000, suggesting the decline is steady rather than sporadic. As such, the Ethereum network is seeing fewer transactions, less contract interaction, and weaker dApp usage, especially at a time when the asset is under price pressure.
Without a noticeable recovery in address activity, CryptoQuant data shows suggests that the bears have the advantage.
“Unless we see a strong and sustained recovery in active addresses, any potential price rally could remain vulnerable. Traders should view this continued decline in fundamental network activity as a crucial signal in their analysis.”
If you fail here, $3,500 becomes a reality
At the time of writing, Ethereum is trading around $3,714, continuing its recent decline as bearish sentiment continues to pressure the market. Over the past month, the leading altcoin has fallen approximately 17.4%. The weakness has increased even further in the short term, with another 5% decline in the last 24 hours alone.
Following the latest dump, crypto analyst Ted Pillows said that ETH has now reached a critical support zone. Therefore, if buyers strongly defend this support, there is room for a recovery towards the $4,000 region. However, if the price convincingly falls below this zone, Pillows expects a sharper continuation lower, which could potentially send Ethereum towards or even below the $3,500 area.
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