Ethereum Price Drops 10% in Q1 2025 Amid Declining Network Activity

Ethereum has been under significant downward pressure in recent weeks, with the price falling to multi-year lows in the first quarter of 2025. The ETH/BTC ratio has also reached alarming levels, indicating that Ethereum's struggles are far from over. This price decline has fueled bearish sentiments among investors, particularly long-term holders of the token. According to CryptoQuant, the drop in activity on the Ethereum network is a primary factor behind the price crash. This reduced activity results in lower demand for ETH, driving the price down further.

The Ethereum network relies heavily on decentralized applications (dApps) and smart contracts for its activity. However, CryptoQuant reports a decreasing interest in these applications, leading to lower usage of ETH for gas fees. This reduced demand for gas fees exacerbates the selling pressure. Additionally, the rise in ETH inflows to centralized exchanges is a concern, as increased inflows often indicate a selling trend, which drives prices lower. CryptoQuant highlights a consistent pattern of higher inflows, contributing to the bearish sentiment.

Last year, Ethereum underwent the Dencun upgrade, which introduced blobs and significantly reduced transaction fees. This led to less ETH being burned and more being minted, making ETH inflationary again. With the ETH burn rate near its lowest, bears have taken control. CryptoQuant analyst Egyhash mentioned that Ethereum has a chance at potential recovery if there are positive changes in network activity. Increased transactions would lead to higher transaction fees and more ETH being burned, which could help stabilize the price.

Currently, Ethereum has failed to hold onto key support levels and requires sustained buying pressure to show any positive movements. Given Ethereum’s situation, it is important to analyze its performance on the charts and make an ETH price prediction. ETH commenced trading at $1,790 and reached $1,833 in the first three hours of trading. However, it faced resistance at the $1,835 mark and found support at $1,819. Rapid action on the MACD followed, and ETH spiked to $1,842 before falling due to an extended death cross. It broke the support level and touched $1,808 before facing a reversal. The initial uptrend was stopped by the $1,823 level, and ETH slumped downward, finding support at $1,757. The RSI reported oversold levels at this point, and as buying pressure picked up, ETH showed high fluctuations between the support and $1,790 resistance. At 15:10, ETH attempted to break the resistance again but failed. With a slight price correction, the uptrend continued, reaching $1,822 by midnight. On April 4, ETH faced some correction due to overbought levels and fell to a support of $1,783.

The Ethereum price has shown some stability in the last 24 hours. If ETH can break the $1,823 resistance early today, the next key level to watch will be $1,850. However, achieving this would require sustained buying pressure, which has been lacking in Ethereum’s recent performance. According to the analyst's forecast, if there are positive changes in network activity, Ethereum has a chance at potential recovery. Increased transactions would lead to higher transaction fees and more ETH being burned, which could help stabilize the price.