Ethereum (ETH) is currently experiencing what could be its most challenging first quarter in history, with returns for the cryptocurrency declining over 6% so far this month alone.
Experts attribute this downturn to ongoing selling pressure, reduced network usage, and a significant drop in active addresses.
Ethereum Faces Mounting Pressure
Recent data from CryptoRank indicates that ETH’s performance has remained in negative territory for the initial months of the year. Specifically, returns fell by 1.28% in January, which was followed by a more substantial decrease of 32.2% in February. With March showing a further decline of 6.27%, Ethereum is on the brink of recording one of its weakest starts to a year since its inception.
Historically, the asset has faced tough quarters, including Q3 2018 and Q2 2022. The second quarter of 2018 was particularly notable, beginning with a 13.8% plunge in May and culminating in losses exceeding 42% by November.
Interestingly, prior to Q1 2025, Ethereum’s worst start also occurred in 2018 when it recorded negative returns in February and March; however, the asset managed to rebound significantly in April that year, soaring by more than 68%.
Beyond its price performance, Ethereum is grappling with additional challenges. Daily token burns have reached historic lows, with only 50.03 ETH, valued at less than $100,000, burned on March 23. This reduction is associated with the EIP-1559 mechanism introduced aimed at moderating inflation during periods of heightened network activity, which mandates that all ETH used for base transaction fees on the blockchain be burned. The declining burn rate may indicate a slowdown in transaction volumes and a drop in active addresses.
A Glimmer of Hope?
In spite of the prevailing challenges, there are glimmers of hope for Ethereum’s future trajectory. Some analysts have observed a significant shift, as ETH holders are moving their tokens off exchanges at unprecedented rates.
According to Santiment, less than 9 million ETH remain on trading platforms, marking the lowest level in nearly ten years. This trend may suggest that investors are choosing to hold their assets long-term, thereby alleviating some of the selling pressure. Additionally, many holders are staking their ETH or transferring it into decentralized finance (DeFi) platforms, which could indicate a renewed confidence in Ethereum’s potential for future price recovery.
As it stands, the fate of the cryptocurrency hinges on crucial price levels and broader market trends. If Ethereum can reclaim the $2,100 mark and maintain upward momentum, a recovery could be on the horizon. Conversely, failing to achieve this crucial threshold may lead to further declines and solidify its position as facing the worst first quarter in its history.
As of the time of writing, ETH was trading at $2,091, reflecting a 3.8% increase over the day. Its market capitalization stands at $252.1 billion, with a 24-hour trading volume of $12.37 billion. Nevertheless, the asset remains down 22.3% in the past month and 37.6% year-over-year.
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