Ethereum’s Paradox: Record Address Growth Meets User Decline – Here’s Why

Ethereum's network tells a contradictory tale in 2025 – wallets multiply while active users dwindle. Is this the calm before the storm or a structural shift?

The Address Explosion: Vanity Metrics or Real Growth?

Fresh wallets pile up like unread whitepapers, but chain activity paints a different picture. Developers keep building while retail hesitates – classic crypto cognitive dissonance.

Gas Fees Strike Again (Or Do They?)

Blame Layer 2s for fracturing activity, praise them for saving users from mainnet gas nightmares. The scaling trilemma claims another victim: clean analytics.

Institutional Chess Moves Quietly Reshape the Board

Whales accumulate through OTC desks while moonboys check price charts. The real action happens off-chain – just like Wall Street prefers it.

Ethereum evolves while speculators nap. The network grows up – whether its 'investors' notice or not. (Meanwhile, traditional finance still can't tell the difference between a smart contract and a PDF.)

Buyers are unfazed, but will they hold the line?

Derivatives data showed that Spot Taker CVD (90-day) continued to flash Taker Buy Dominance as of the 6th of July.

This metric tracks the cumulative volume difference between market buys and sells, and its current reading suggests aggressive dip-buying behavior.

Therefore, market participants appear to absorb sell pressure from the Foundation’s outflows. 

This buyer strength indicates that ETH might maintain support above $2,500 despite macro bearish undertones.

Such conviction typically comes from institutional or high-conviction traders expecting a near-term rebound.

Source: CryptoQuant

Is ETH’s user base growing or just shifting in activity?

According to IntoTheBlock data as of the 6th of July, New Addresses on the Ethereum network rose by 6.2%, hinting at fresh onboarding.

However, Active Addresses dipped 3.3%, while Zero Balance Addresses fell 8.54%, signaling a reduction in churn and potentially disengaged users.

This suggests that while speculative interest is climbing, long-term holder activity may be tapering off—a divergence that complicates Ethereum’s growth narrative.

Without continued engagement from the base, this surge in new addresses may not convert to real demand.

Source: IntoTheBlock

Are whales losing faith while smaller holders step in?

Ethereum’s investor composition has shifted notably in the past 30 days. Whale holdings decreased by 0.58%, while investors and retail segments ROSE by 5.68% and 1.18%, respectively. 

This redistribution may show that whales might be exiting or reallocating, while smaller participants increase their stakes.

Such behavior can reflect a growing decentralization of ownership, but it may also indicate reduced institutional conviction. 

Of course, smaller holders may lack the firepower to sustain price rallies in the absence of whale participation. Without deeper pockets backing the bid, upside momentum could stall quickly.

Source: IntoTheBlock

Can ETH break past the liquidation wall near $2,550?

The Binance ETH/USDT Liquidation Heatmap revealed heavy liquidation clusters between $2,480 and $2,550, indicating this zone as a pressure point.

If ETH closes decisively above $2,550, it could unleash a short squeeze, wiping out bearish positions and pushing the price higher. However, repeated rejections here WOULD embolden bears and potentially trap late longs.

In essence, this level acts as both resistance and a volatility trigger. What ETH does next here may set the tone for the rest of July.

Source: CoinGlass

Ultimately, ETH faces a pivotal moment as Foundation outflows, whale retreat, and user activity shifts converge. 

Yet, persistent buyer dominance and rising investor interest provide a counterbalance to bearish signals. 

If ETH can clear the $2,550 zone, it may confirm strength despite Foundation sales. The next MOVE will likely hinge on whether buyers maintain their momentum or falter against increasing sell pressure.