The Ether (ETH) prices are down by 50% despite the on-chain activity of Ethereum being at its all-time high. ETH is currently consolidating at May 2025 levels, and there could be a price recovery coming in the near future as the technical indicator flashes a signal.
On-chain activity ≠ price if liquidity leaks
Priced just above $2,000, ETH is currently 50% down from 2021 levels, even when its on-chain activity is much higher than what it was back in 2021.
Usually, when the on-chain activity rises, the prices also rise in tandem with it. However, the divergence here points out that there is some other factor that is at play, as the on-chain activity and the respective prices of ETH are poles apart.
In an X post, CryptoQuant, a crypto analytical platform, pointed out that the on-chain activity won’t be equivalent to the prices when the capital has been leaking out of the coin.
Although the network activity on Ethereum reached record levels, its price can remain weak if liquidity is leaving the market. Metrics such as active addresses, transaction counts, and smart contract interactions measure how much the network is being used, but they do not necessarily reflect investor demand for ETH itself.
Price movements in financial markets are largely driven by capital flows – when money enters the market, it creates buying pressure, and when it exits, prices tend to fall.
Much of Ethereum’s recent activity is linked to stablecoin transfers and DeFi usage, involving assets like USDT and USD Coin, which increase network activity without generating significant demand for ETH.
At the same time, capital may rotate to other assets such as Bitcoin or move into traditional markets. The prevailing geopolitical tensions could have sent the traders into a risk-averse mode.
As a result, strong network growth does not always translate into higher prices when liquidity is flowing out of the asset.
Bullish momentum builds under cover
As shown in the chart below, Ethereum is fluctuating inside a falling wedge, which eventually will break out. With prices lingering just above the lower trendline, there is a high chance that ETH could recover and reach the 50-day MA, which is at $2,205.
From a technical point of view, the relative strength index (RSI) is showing a bullish divergence – the RSI is making higher lows while the ETH prices are consolidating. This means that there is bullish momentum being built, although the ETH prices have not reflected it.
In addition, the fixed range volume indicator shows increased activity in this price range, adding to the fact that the prices could recover faster.
