Ethereum rallies 15% as on-chain demand falls

Ethereum’s price rose about 15% over the past month while several on-chain activity measures declined. Daily active users fell 33% from a January peak of roughly 15 million to about 10 million by April. Average gas fees on the network have fallen to about 1 gwei, the lowest sustained level in roughly two years.

Exchange flows shifted during the same period. Through April 28, daily net outflows averaged about 300,000 ETH as wallets moved coins to private custody. On May 1, that pattern reversed, and by May 4 exchanges had recorded net inflows totaling 60,449 ETH. Net inflows increase the amount of ETH held in exchange wallets, where tokens can be offered for sale.

Price action since Feb. 6 shows ETH trading inside a rising parallel channel that formed after a roughly 48.8% drop from a January high near $3,407 to a February low around $1,747. Trading volume trended lower while price climbed during the same window.

Technical levels cited by market participants place resistance near $2,466. Support levels include $2,074 (0.236 Fibonacci), $1,831 (0.382), the February low at $1,747, and $1,635 (0.5). A daily close above $2,466 would place price nearer the channel’s upper trendline; a close below $2,074 would mark a breach of the channel structure.

A similar pattern occurred in July 2024, when active users and gas remained low while price rose ahead of large institutional flows, and the market dropped about 40% within days in that episode.

Over the past month, price rose while daily active users declined, average gas remained low and custody flows shifted from net withdrawals to net inflows on exchanges.