Ethereum Defies Gravity at $3.6K While Daily Transactions Approach Record Highs

Ethereum isn't just holding its ground—it's flexing. The $3.6K support level stands firm as network activity nears all-time highs, proving even Wall Street's 'crypto winter' doomsayers wrong—again.

Transactions are pumping like a DeFi yield farm in 2021. Daily activity inches toward record territory, signaling users are voting with their gas fees. No banks, no problem.

Meanwhile, traditional finance still can't decide whether to FOMO in or short it. Spoiler: they'll be late either way.

Sideways Price Action, But Strong Fundamentals

While Ethereum’s price action has been relatively flat, fluctuating between $3,380 and $3,874 over the past week, this period of consolidation suggests a balanced battle between buyers and sellers. Technical indicators show neutral momentum. ETH is hovering just below the 20-day simple moving average of $3,685, with the Relative Strength Index (RSI) at 58—indicating neither overbought nor oversold conditions.

Most technical oscillators, such as the Stochastic, Commodity Channel Index (CCI), and MACD, also show a neutral trend. Moving averages are still in favor of bulls, as ETH continues to trade above its 10-day to 200-day simple and exponential moving averages. However, without a strong breakout or breakdown, the market remains in a wait-and-see mode.

If ETH breaks above $3,685 with strong momentum, the next resistance level could be around $3,920. On the downside, $3,450 remains a key support level that traders are watching closely.

Drop in Trading Volume Suggests Slower Market Pace

Despite the uptick in transaction count, overall trading activity is showing signs of cooling. Daily trading volume has fallen by 15.6% to $22.2 billion, and derivatives volume has decreased by more than 20%, now standing at $77.2 billion, based on Coinglass data. Open interest has also declined slightly, pointing to reduced speculative activity in the market.

This suggests that while Ethereum’s network is busier, traders may be taking a more cautious stance amid uncertain market direction.

Stablecoin Demand Boosts Ethereum Usage

One of the main drivers behind Ethereum’s rising transaction volume is the return of strong demand for stablecoins, particularly Tether (USDT) and USD Coin (USDC). These dollar-pegged assets have seen increased on-chain activity, contributing significantly to the network’s usage.

The renewed interest in stablecoins comes in the wake of the U.S. passing the GENIUS Act, a legislative effort that offers regulatory clarity for dollar-backed digital assets. This development has boosted confidence in the stablecoin market, leading to more transactions and interaction with Ethereum-based protocols.

The resurgence of stablecoin activity has also helped Ethereum regain some ground lost last year to faster and cheaper alternatives like Solana (SOL).

Institutional Demand Continues to Rise

Alongside strong network metrics, Ethereum is also benefiting from growing institutional interest. According to Nate Geraci, president of NovaDius Wealth, institutional investors have ramped up ETH accumulation in recent months.

Data shows that ETH-treasury-holding companies and U.S. spot ETH exchange-traded funds (ETFs) now each control about 1.6% of Ethereum’s total supply, totaling a combined 3.2%.

Strategic ETH Reserve data highlights that 64 companies currently hold a total of 3.03 million ETH, valued at roughly $11.8 billion. Meanwhile, U.S. spot ETH ETFs have seen their net assets grow to $20.61 billion—an impressive sign of confidence from large-scale investors.

Outlook: Strong Demand, But Waiting for a Breakout

While Ethereum’s price hasn’t shown strong movement recently, the underlying data suggests growing strength in the network. The increase in transactions, renewed stablecoin demand, and institutional accumulation all point to a healthy and active Ethereum ecosystem.

However, the decline in trading and derivatives volume implies that traders are still waiting for a stronger price signal before making their next move. Whether ETH breaks above $3,920 or drops below $3,450 could determine the next major trend.

For now, Ethereum appears to be in a consolidation phase, holding firm above $3,600 as fundamental indicators continue to improve. The combination of increased usage and long-term investor interest may provide the fuel needed for the next upward move.