CryptoQuant: Ethereum has lost 60% of the current cycle’s peaks

The cryptocurrency Ethereum ETH $1,783.03 Bridged Ether (StarkGate) 1.92% Market capitalization $0.16 billion VOL. 24 hours $0.92 billion continues to lose value, showing weaker performance compared to Bitcoin BTC $83,286.29 Bitcoin 1.50% Market capitalization $1.65 trillion VOL. 24 hours $2.67 billion and some major altcoins. As of early April 2025, the ETH price is trading more than 60% below the peak of the current market cycle.

According to analysts at CryptoQuant, the key reason for the decline is the decline in activity on the Ethereum network. In recent months, the number of active addresses has been decreasing, as well as average transaction fees. This has led to a decrease in the volume of ETH burning, a process that was supposed to reduce the supply of coins and support the deflationary model of the asset.

The burning mechanism was introduced when the network switched to the Proof-of-Stake algorithm as part of the Merge update. Its goal was to ensure a steady decline in the number of coins in circulation. However, after the next Dencun update, which lowered transaction fees, the amount of ETH burned plummeted, while the issuance remained high, making the ether inflationary again.

An analyst under the pseudonym EgyHash notes that while the level of activity on the network remains low and the rate of coin burning is minimal, the cryptocurrency is under significant pressure from inflation. This, combined with the recent announcement of trade duties in the United States, has further deepened the decline.

According to analysts, a possible recovery can only occur if network activity increases, primarily by increasing the number of transactions and users. This would contribute to the growth of commissions and, accordingly, an increase in the volume of ETH burning. But the market is not showing such signals at the moment.