CryptoQuant Reveals Ethereum's "Adoption Paradox": Users Double While Funds Flee, ETH Could Plunge to $1500 by Year-End

CryptoQuant Research Director points out that Ethereum network activity has hit a record high, but ETH prices have plummeted nearly 60% from their peak. The realized market cap change has turned negative. If the bear market continues, ETH could fall to $1,500 by late Q3 to early Q4.
(Background: Wall Street is losing interest in Ethereum: Why are fundamentals diverging from ETH prices?)
(Additional context: VanEck: If Layer 2 continues “siphoning” ETH, it will significantly impact ETH, making the target price difficult to reach $10,000.)

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• Activity doubles, but price halves
• Realized market cap turns negative
• If the bear market persists, ETH may drop to $1,500

Ethereum faces a confusing situation: network usage hits all-time highs, but prices remain weak. CryptoQuant calls this the “adoption paradox” and warns that if capital outflows from ETH don’t reverse, the price could fall further to $1,500.

Activity doubles, but price halves

CryptoQuant Research Director Julio Moreno states in a recent report that Ethereum’s network activity is at a historic peak. In February, active addresses on the Ethereum network surged to over 1.1 million, more than doubling compared to the same period last year; in March, the number of token transfers exceeded one million, and smart contract calls also hit new highs.

Related reading: Ethereum on-chain activity explodes: daily active addresses hit 2 million, smart contract calls surpass 40 million

However, ETH’s price performance starkly contrasts these impressive on-chain metrics. ETH has fallen nearly 60% from its recent cycle high. Moreno describes this as a “clear divergence between network usage and asset performance.”

Realized market cap turns negative

One key clue behind this divergence lies in Ethereum’s “realized market cap” data.

Realized market cap measures the net capital inflow or outflow of an asset. CryptoQuant data shows that Ethereum’s annual change in realized market cap has recently turned negative, indicating that more capital is flowing out of the Ethereum ecosystem than flowing in.

Moreno emphasizes that this data reveals a crucial fact: ETH’s price trend is driven by capital flows, not by growth in network activity. In other words, even as more users are using the Ethereum network, investors are withdrawing from ETH as an asset.

If the bear market continues, ETH may fall to $1,500

Based on this analysis, Moreno offers a bearish price forecast. He states that if the current bear market persists, ETH could further decline to around $1,500 by late Q3 to early Q4.

This is not the first time the market has questioned Ethereum’s valuation. With the rapid development of Layer 2 scaling solutions, a large portion of transaction activity has migrated from the mainnet to L2, leading to a sharp decline in mainnet fee revenue. VanEck previously lowered its 2030 ETH target price from $22,000 by 67% to $7,334 due to the Layer 2 “siphoning” effect.

However, some analysts hold different views. CryptoQuant CEO Ki Young Ju’s earlier research shows that among 12 common valuation models, 9 suggest ETH is severely undervalued, with fair value above $4,836. Market opinions on Ethereum’s long-term value remain highly divided.