[Analysis] "Ethereum activity hits a two-year high…widening gap between market and on-chain metrics"

Activity on the Ethereum (ETH) network has been shown to have reached its highest level in two years.

A CryptoOnChain contributor to CryptoQuant said on the 31st (local time) via CryptoQuant that "as of the 29th, Ethereum’s network 'Transfer Count' surged to 1.06 million," calling it "the highest level since October 2023." Transfer Count is an on-chain indicator that shows how frequently tokens or specific addresses have been transferred on the blockchain.

CryptoOnChain noted that "(the Transfer Count) showed high volatility throughout Q4 this year." It added, "By contrast, Ethereum’s price has seen a steep correction from around $4,500—its year-to-date high—to around $2,900," and analyzed that "the sharp jump in Transfer Count nevertheless suggests a growing divergence between market price and on-chain usage."

It went on to stress that "when Transfer Count surges during a declining price phase, it can generally be interpreted in two scenarios." CryptoOnChain said, "One is panic selling close to capitulation," and "the other is a pickup in on-chain activity such as DeFi and non-fungible token (NFT) issuance driven by lower gas fees." It added, "This surge exceeds all peaks in 2024 and 2025," meaning "asset turnover on-chain has strengthened significantly."