PANews reported on March 13th that, according to The Block, on-chain analytics firm CryptoQuant stated that Ethereum is facing an "adoption paradox," where network activity is reaching record highs while the price of ETH is falling sharply. CryptoQuant's head of research stated that if the bear market continues, ETH could fall further to around $1500, a level that could appear by the end of the third quarter or the beginning of the fourth quarter of this year.

Data shows that Ethereum's daily active addresses hit a record high last month, surpassing the levels seen during the 2021 bull market, while ETH has fallen more than 50% from its current cycle high. Activity generated by smart contracts and automated protocols has also surged, with internal contract calls reaching a record high last month. However, historical correlations have deteriorated, and the positive correlation between ETH price and contract-driven activity has weakened. CryptoQuant points out that exchange inflows are a better explanation of ETH price dynamics than network activity metrics, and ETH's higher exchange inflow ratio relative to Bitcoin suggests stronger relative selling pressure. Ethereum's realized market capitalization change recently turned negative, indicating capital outflows despite continued growth in on-chain activity. The research director stated that ETH needs to see positive capital inflows and lower exchange inflows to emerge from the bear market.