Ethereum’s network metrics are flashing warning signals despite recent price resilience above $2,500. Recent analysis of post-Pectra capital flows reveals concerning trends in user engagement that could impact ETH’s long-term growth trajectory.
Pectra Upgrade Falls Short of Activity Expectations
The highly anticipated Pectra upgrade, launched in early May 2025, has failed to catalyze the expected surge in network activity. This comprehensive upgrade, combining the Prague execution layer hard fork with the Electra consensus layer update, was designed to enhance scalability and efficiency. However, on-chain metrics paint a concerning picture:
- New address creation down 1.8% since upgrade
- Resurrected addresses declined 8.4%
- User churn decreased by 8.5%
- Overall network engagement remains subdued
Network Health Indicators Show Mixed Signals
Glassnode’s latest analysis highlights a persistent weakness in Ethereum’s core ecosystem metrics. The ETH Month-over-Month activity Retention metric indicates that both new and returning user numbers have fallen below year-to-date averages, raising questions about network adoption trends.
Price Action Remains Resilient Despite Network Concerns
While network activity wanes, ETH’s price continues showing strength near the $2,500 level, though technical indicators suggest potential overheating. Market analyst ShayanMarkets predicts a short-term correction before a possible breakout, citing:
- Increased trading volume at $2,500 resistance-turned-support
- Signs of profit-taking at current levels
- Fresh demand potentially driving future price action
FAQ: Ethereum Network Activity
Why is Ethereum network activity declining?
The decline may be attributed to multiple factors including market cycles, increased Layer 2 adoption, and potential user migration to alternative blockchains.
Will the Pectra upgrade impact ETH price long-term?
While immediate network metrics are subdued, the upgrade’s long-term impact on scalability and efficiency could positively influence ETH’s value proposition.
What are the key metrics to watch?
Key indicators include new address creation, user retention rates, transaction volumes, and gas usage patterns.
Time to read: 5 minutes