Key Takeaways:

• Whales have offloaded over 500,000 ETH in the past 48 hours, intensifying selling pressure.
• ETH’s dominance has plunged to 8%, marking a 60% drop since mid-2023.
• Record-low fees and burn rates post-Dencun upgrade have worsened ETH’s inflation problem.

Ethereum’s recent price movement may seem calm on the surface, but a deeper look reveals rising undercurrents. In the last 48 hours, top market observer Ali drew attention to a major selloff by a big investor, with over 500,000 ETH being unloaded, according to data on-chain by Santiment.

This precipitant offloading places significant stress on the asset, which already suffers from systemic issues. Even as ETH prices ticked up briefly by 1.55% over the past four hours to $1,797.07, the context is alarming.

This short-term rebound does little to counteract the long-term downtrend in Ethereum, especially if big players are selling out. Although short-term rallies tend to mask structural issues beneath the surface, Ethereum’s are already beginning to manifest in the figures.

CryptoQuant’s recent analysis reflects Ethereum’s underlying issue: diminishing network usefulness. From the start of 2025, the active count of addresses on the Ethereum network has been continuously declining.

That decrease in user involvement has been a contributing cause to transaction fees and block rewards hitting historical lows, a trend that undermines the very inflation-dampening mechanism that Ethereum depends on.

Dencun upgrade, previously touted as a game-changer, seems instead to have accelerated the problem. Crash in average fees caused the burn rate of Ethereum to hit a since-the-Merge low, with new issuance surpassing destruction.

What this does is create a net inflationary environment, watering down the worth of ETH over the long run. In short, Ethereum’s producing more than it’s burning, a potentially disastrous trend for any asset intended to appreciate in value.

Rekt Capital’s recent analysis indicates a precipitous fall in ETH’s dominance from a June 2023 level of 20% to a current level of just 8%. That’s a collapse of 60% in a little over one year. ETH Dominance is the proportionate weighting of the total crypto market cap minus Bitcoin, and the fall presents a bleak image of diminishing confidence in the market.

The chart, shared on April 4, indicates that Ethereum is back in a familiar historical support zone (7.5%–10%) last tested in 2019 and 2020. In both cases, ETH managed to reverse its fortunes.

But the current context is more complicated: Bitcoin dominance increased to 62%, and Ethereum dropped by 44% in Q1 2025. Layer-2 congestion, increasing regulatory friction, and diminished investor interest all contribute to this long-standing weakness.

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