Is Ethereum (ETH) Overheated? Historic Warning Sign Emerges Onchain

Key Insights:

• Ethereum (ETH) transfer activity spikes to levels last seen near past market tops.
• Network usage hits record highs even as risk signals begin to surface.
• Vitalik Buterin’s recent ETH sales add to short-term market caution.

Ethereum (ETH) overheated network concerns are growing after fresh onchain data showed a sharp jump in activity that has, in the past, appeared close to major market turning points.

The latest figures are drawing attention from traders, analysts, and long-term holders who remember how similar signals played out before.

Ethereum (ETH) Overheated Network and Market Impact

Ethereum overheated network discussion picked up after the transfer count data showed an unusual spike.

On January 29, 2026, the total transfer count of Ethereum (ETH), measured with a 14-day simple moving average, climbed to about 1.17 million.

This kind of surge has appeared before at important moments. In January 2018, a similar jump in transfers happened near the market peak, shortly before Ethereum entered a long decline.

The same Ethereum (ETH) pattern showed up again in May 2021, around the time of a sharp market crash. In both cases, the level of activity on the network is high, but then the prices fell.

Generally, high levels of transfer activity mean that many coins are changing hands.

Ethereum (ETH) Transfer Count Surge | Source: CryptoQuant

This could imply that large holders are moving coins to the exchange, traders are responding to rapid changes in price, or people are taking profits.

When this happens close to price highs, it can signal stress rather than strength. This does not mean a drop must happen right away, as markets do not repeat events on a fixed schedule.

Still, traders tend to treat these moments carefully because the pattern has been consistent in the past.

The Ethereum (ETH) overheated network signal is not a prediction. It is a warning that risk may be higher than usual.

Ethereum Adoption Metrics Reach New Highs

While warning signs are getting attention, Ethereum adoption numbers are telling a more positive story.

Active addresses on the network have reached a new all-time high.

This shows that more users are sending transactions, using applications, and interacting with smart contracts than ever before.

Analyst Joseph Young pointed out that rising active addresses reflect real use, not just trading noise.

Development is still going on on Ethereum (ETH), and users are still using it for their needs.

However, high adoption does not always result in price stability. In past cycles, Ethereum also experienced high usage near its price peaks.

The usage was still high, but prices went down as traders tried to save their funds.

This is a double-edged sword as, on one side, high adoption is a sign that Ethereum is still important.

On the other, past cycles suggest that high usage can exist alongside falling prices.

For many market watchers, this is why adoption data alone is not enough to judge short-term direction.

Why Vitalik Buterin Has Been Selling Ethereum (ETH)?

Recent transactions involving ETH by the Ethereum co-founder Vitalik Buterin have also been a subject of market discussions.

Data presented by Lookonchain indicated that wallets linked to Vitalik Buterin had sold around 2,961.5 ETH in a period of three days.

The total amount generated from these transactions was around $6.6 million, with the average price being around $2,228.

At the same time, it was also indicated that these transactions were still in progress.

Although these transactions involving ETH by Vitalik Buterin received a lot of market attention, it is also important to consider that he has been selling ETH in the past for various reasons.

Still, timing matters in markets. When visible sales happen during periods of high onchain activity, traders tend to pay attention.

Notably, combined with the Ethereum overheated network signals, the sales add to a cautious mood.

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