CryptoQuant: Ethereum Faces 'Adoption Paradox,' ETH Price May Fall to $1,500

ChainCatcher report, according to The Block, blockchain analytics firm CryptoQuant has stated that Ethereum is facing an "adoption paradox," where network activity has reached record highs while the price of ETH has declined sharply. CryptoQuant’s Head of Research said that if the bear market persists, ETH could fall further to around $1,500, a level that may be reached by the end of Q3 or early Q4 this year. Data shows that Ethereum’s daily active addresses last month hit a record high, surpassing levels seen during the 2021 bull market, while ETH has dropped more than 50% from its peak in this cycle. Activity generated by smart contracts and automated protocols has also surged, with internal contract calls reaching an all-time high last month. However, historical correlations have deteriorated, as the positive relationship between ETH price and contract-driven activity has weakened. CryptoQuant noted that exchange inflows better explain ETH price dynamics than on-chain activity metrics; the relatively high exchange inflow ratio of ETH compared to Bitcoin indicates stronger relative selling pressure. Ethereum’s realized market cap year-over-year change has recently turned negative, signaling capital outflows despite continued growth in on-chain activity. The research head stated that ETH needs to see positive capital inflows and lower exchange inflows to exit the bear market.