Ethereum Faces Contradiction: Network Activity Surges But ETH Price Plummets

New_Ser_Ngmi · 2026-03-23T16:22:48+00:00

CryptoQuant warns of a "paradox of confirmation" in Ethereum, where increased network activity does not correlate with ETH price, which has dropped over 50%. High inflow to exchanges indicates selling pressure. For recovery, positive capital inflows are needed.

New_Ser_Ngmi

2026-03-23 16:22:48

Abstract generation in progress

CryptoQuant points out a concerning phenomenon where Ethereum is facing what they call the “verification paradox” — a situation where the relationship between network activity and ETH price begins to diverge. According to data from The Block, a blockchain analytics company, CryptoQuant found that although daily active addresses and smart contract transactions reached all-time highs, the ETH price has dropped more than 50% from its recent peak.

The “Work but No Price” Phenomenon on the Ethereum Network

CryptoQuant’s chief researcher states that the positive correlation between ETH price and activity driven by smart contracts has significantly weakened. Data from last month shows that contract calls hit record highs, but this is no longer reflected in the market price. This phenomenon differs from the 2021 bear market, when network activity and price were more closely correlated.

Strong Selling Pressure from Inflows to Exchanges

Ethereum’s market situation can be better explained through the lens of inflows to exchanges rather than network activity indicators. Notably, ETH inflow rates to exchanges are clearly higher than Bitcoin’s, indicating stronger selling pressure. This reflects how institutions and holders are managing their liquidity.

The true value of Ethereum compared to last year has recently turned negative, signaling that capital is flowing out despite the blockchain’s ongoing growth and usage potential. Currently, ETH is priced at $2.13K, with a 2.73% increase over the past 24 hours.

Looking for a Way Out of the Bear Market Loop

For Ethereum to truly break free from the bear market, CryptoQuant suggests that clear changes in key indicators are necessary, including positive capital inflows and reduced inflows to exchanges. The current situation Ethereum faces serves as a reminder that network activity and market price are not the same indicators. Everything depends on the direction of capital flows. The chief researcher warns that if the bear market continues, ETH could risk falling to around $1,500, possibly in late Q3 or early Q4.

ETH4,48%

BTC3,59%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

2 Likes