Ethereum Network Usage Surges Despite Weak Price Action

Key Insights

• The Ethereum network had an average total transfer count of 1.3 million in a sign of increased activity.
• Analyst sees this as a bullish sign for ETH, noting that price will catch up with real-world utility.
• ETH has gained 9% in the past seven days and has been outperforming BTC for the past few months.

Ethereum total transfer count has once again surpassed 1.3 million in 7-day simple moving average. This marks a return to the all-time high recorded in mid-February, in a sign of increased network usage.

The surge in transfer count sharply contrasts with the ETH price. The token struggles to gain momentum.

Ethereum Network Activity Signals Bullish Divergence

According to the CryptoQuant analyst who identified the surge, the metric reflects Ethereum’s fundamental strength and utility. They noted that it is a sign of increasing network adoption and a dynamic ecosystem.

ETH is currently trading around $2,200, well below its peak price. This makes the divergence between network activity and price performance even more evident.

The analyst noted this could be a bullish signal. It shows Ethereum’s intrinsic value is rising faster than its market valuation.

They wrote:

The crypto analyst further noted that the surge in activity could also have a deflationary impact on the ETH supply. Higher transaction volume usually means more gas is being used on Ethereum. This will lead to increased burning of the ETH in circulation.

Based on this, the CryptoQuant analyst predicted a sustained organic demand for the Ethereum blockchain. They argued that this demand will eventually translate into a price increase.

They said:

Ethereum Sees 9% Gain in One Week

Despite Ethereum’s weak price action, the token appears to be on the path to recovery. It has gained almost 10% over the past week. It is now trading at $2,255, an improvement from recent price action, even as it remains down 25% this year.

Most of the positive performance is driven by the broader recovery of the crypto market, with Bitcoin also above $73,000. Still, Ethereum has outperformed Bitcoin in the past 90 days, gaining 9% compared to BTC’s 3%.

It also outperformed Bitcoin last month, rising 7%. XWIN Research explained that this is likely due to capital reallocation as investors see ETH as a higher-beta asset. Its realized volatility is higher than BTC’s, which suggests potentially higher returns.

They wrote:

Interestingly, Ethereum is also seeing reduced selling pressure amid increased exchange outflows. The analysts noted that this is an early signal of demand recovery, positioning it to perform better in the current phase.

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