Ethereum, the second-largest cryptocurrency by market capitalization, is facing a significant downturn in network activity. New active addresses on the Ethereum network have plummeted by 43% over the past three months. This sharp decline underscores reduced investor engagement and network utilization.
Data from The Block reveals notable fluctuations in Ethereum's network metrics. On June 27, new active addresses peaked at 138,620, but this figure dropped drastically to around 89,000 in early July.
August saw the number fluctuate between 80,000 and 95,000. It briefly rebounded above 100,000 at month's end, however, the upward trend was short-lived. Despite a recent price uptick, new active addresses fell to 78,100 on September 24. This marks a 23.43% decline. Currently, the figure remains below 80,000.
Total active addresses have also decreased. On June 9, they reached 702,857, but by September 22, this number had fallen to 574,073. This represents an 18.32% decrease from the June high.
A drop in new active addresses often signals decreased user engagement, and this typically leads to reduced overall network activity and transaction volume.
IntoTheBlock data supports this trend.
The total volume of large transactions on Ethereum peaked at 2.91 million on July 5. By September 29, this had fallen to 1.79 million (a 38.4% decrease).
Despite these concerning figures, there's a glimmer of hope. Market intelligence platform Santiment reports that Ethereum network activity is starting to pick up. However, this increase coincides with rising gas fees.
Ethereum briefly lost its top spot in 24-hour Decentralized Exchange (DEX) volume on September 25. Solana temporarily claimed the lead with a volume of $1.123 billion, while Ethereum's volume stood at $1.118 billion. Ethereum has since reclaimed its leading position. Its 24-hour DEX volume now stands at $1.559 billion, an 11% increase. Solana's volume, while up 32.94%, remains lower at $1.251 billion.
These fluctuations highlight the volatile nature of the cryptocurrency market. Ethereum's declining network activity, despite recent price gains, raises questions about its long-term user engagement and adoption trends, or - as someone might surmise - whether Ethereum is finally starting to loose its ground and give the initiative to its arch enemy - Solana. We'll have to wait and see if the numbers support this assumption.