ETH Price Plummets: Weak Network Activity and Declining Fees Weigh Sparks Investor Concerns! 

Ethereum (ETH) is struggling to stay above the $1,800 mark, sinking 4% in the past 24 hours, while the broader crypto market is still positive. Although Bitcoin is holding up relatively well, Ethereum is under pressure due to the falling fundamentals of its network. A steep drop in transaction fees and active addresses suggests that demand is vanishing. Analysts are raising concerns over ETH’s ability to hold its value. Analysts are suggesting that decreased Ethereum fee burning is raising inflationary risks and is also putting pressure on the price of ETH. 

Ethereum Fee Burn Collapse Raises Inflation Concerns

Data from CryptoQuant analyst EgyHash has indicated that the Ethereum fee burn rate is at its lowest level since 2020, which reduces its deflationary effect. EIP-1559 was meant to burn transaction fees in order to reduce supply, but as network-level activity has dropped off, it has increased inflationary pressure. The Ethereum fee burn chart here illustrates how declining engagement is now contributing to an increase in the overall growth rate of the token supply. This change could indicate longer-term concerns for Ethereum, especially as competitors like Solana and Avalanche gain momentum.

Declining Ethereum Active Addresses Signal Weak Demand

The Ethereum active addresses on a daily basis have been declining and demonstrates a lack of user engagement and growing detachment from the network. The attached Ethereum active addresses chart shows this trend concretely with transaction volume decreases and liquidity declines. The reduction in transactions and declining on-chain activity puts more pressure on Ethereum for a test of key support. Traders will now be watching to see if ETH can regain pace or if these declines in user activity will risk further declines, as technical indicators suggest growing bearish pressure.

Traders are now closely watching key price levels for signs of a potential reversal. Let’s dive into the technical analysis next.

ETH Price Action Analysis 

On the 5-minute chart, Ethereum (ETH) initially moved within a well-defined trading range, fluctuating between support near $1,780 and resistance around $1,810. A sharp breakdown saw ETH briefly breach the lower boundary, triggering oversold RSI conditions. This prompted a quick recovery, pushing prices into an upward trajectory as bullish momentum took over. The price action then formed a rising channel, with ETH climbing toward $1,830. 

Chart 1, Analyzed by Alokkp0608, published on April 4th, 2025

The MACD indicator displayed multiple golden and death crosses, reflecting short-term market volatility and shifts in momentum. As ETH approaches a key resistance zone, the RSI is nearing overbought levels, signaling a possible slowdown or pullback. However, if buyers sustain momentum, ETH could challenge the $1,880 resistance level. Failure to break higher may see a retest of the $1,780 support zone, where buyers previously stepped in. 

ETH Price Outlook: Can Ethereum Avoid Further Declines?

The price movement of Ethereum remains fragile as poor network fundamentals and potential for lower fee burns lead to inflation concerns. Decreases in active addresses and transaction fees suggest dissipating demand which will hinder ETH from establishing a strong recovery. Yet the short-term bullish momentum has driven ETH price to near $1,830, with critical resistance at $1,880. 

Traders are closely watching the $1,780-$1,880 price range, which ETH has reacted to aggressively recently. A possible breakout above $1,880 could provoke bullish momentum while failure to stay above support could force ETH down lower. All in all, bearish pressures are building and the next moves of Ethereum will hinge on whether or not network activity improves or deteriorates.

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