Ethereum has struggled to maintain a convincing bullish narrative as market conditions continue to deteriorate and more analysts are calling for a broader bear market. After months of heightened volatility and repeated corrections, price movements alone are not enough to restore confidence, and participants are becoming increasingly cautious.
This hesitation is now clearly reflected in on-chain data, reinforcing the idea that current weaknesses are structural rather than purely technical.
According to a recent CryptoQuant report, Ethereum network activity has fallen to levels that strongly suggest a withdrawal of retailer participation. Active sending addresses are decreasing towards the 170,000 mark, a threshold that has historically been associated with decreased engagement from small investors. In past cycles, retail activity typically expanded during bullish periods as new participants entered the market, then contracted sharply as confidence waned and price momentum weakened.
Prolonged volatility and price corrective actions are likely to undermine short-term belief in Ethereum, forcing retail participants to the sidelines or exiting the market altogether. This absence is important. Retail flows often play a key role in maintaining momentum during a recovery, without which upward movements tend to stall quickly.
On-chain signals indicate exhaustion, not surrender
According to CryptoOnchain analysis, the sharp drop in Ethereum on-chain activity is consistent with a classic stage of seller exhaustion rather than active capitulation. In this regime, selling pressure gradually subsides as most of the participants who wish to exit exit, but new demand has not meaningfully returned. The result is a fragile equilibrium in which prices may stabilize but upside remains limited because there are no new buyers.
Lack of retailer participation plays a central role in this movement. Retail flows typically provide initial momentum during initial pullbacks and amplify price movements as confidence begins to return. With active sending addresses at a one-year low, that catalyst is currently missing, which helps explain why any attempts at an upward move have been shallow and short-lived.
However, this same environment has historically attracted large and long-term participants. Institutional investors and high-conviction holders often save during periods of low liquidity and low activity when sentiment is decisively negative.
Importantly, reliable recovery signals do not emerge from price trends alone. CryptoOnchain emphasizes that a sustainable transition requires a gradual recovery of active sending addresses, along with price stability.
We see this combination bring back demand and improve network utilization. Conversely, if address activity continues to stagnate or even declines, the risk of Ethereum entering deeper consolidation or even a phase of demand destruction will increase.
While the current situation highlights clear short-term weakness and retail disengagement, similar on-chain setups have historically formed near structural bottoms, creating the potential for medium-term trends to change once activity begins to recover.
Ethereum Price Struggles on Key Structural Supports
Ethereum’s price action on the 3-day chart reflects a market caught between structural support and sustained bearish pressure. After failing to sustain above the $3,200-$3,300 region, ETH rolled over and is now consolidating around the $2,850 region, roughly in line with the 200-day moving average. This level has historically served as a medium-term inflection point, making it important for bulls to defend against further severe changes in trend.
The recent rejection of the $4,000-$4,800 highs indicates a clear break below the highs within the broader structure, reinforcing the idea that momentum has weakened from late 2025. Price briefly regained its 100-day moving average during the mid-year rally, but was unable to sustain acceptance above it, and ETH has since fallen below its short-term average. This suggests that the rally is still being sold rather than actively accumulating.
Price trends are consistent with the market moving toward consolidation rather than immediate capitulation. If ETH definitively loses the $2,800-$2,750 support zone, downside risk widens towards the $2,400 area where long-term trend support is concentrated.
Conversely, a bullish recovery would require ETH to stabilize above its 200-day moving average and regain the $3,200 level with increasing volume. Until then, the chart favors a cautious and range-bound outlook as downside risks still exist.
Featured image from ChatGPT, chart from TradingView.com
editing process for is focused on providing thoroughly researched, accurate, and unbiased content. We adhere to strict sourcing standards, and each page is carefully reviewed by our team of top technology experts and experienced editors. This process ensures the integrity, relevance, and value of your content to your readers.