McGlone flags downside risk for Ethereum as network activity hits record high

Ethereum is sending mixed signals to investors, with bearish macro warnings colliding with record on-chain usage.

Bloomberg Intelligence commodity strategist Mike McGlone said Ether appears vulnerable to further downside, warning that the token is more likely to slip below key support than break to new highs as broader market volatility returns.

The cautious outlook stands in contrast to Ethereum’s on-chain data, which shows accelerating network activity even as prices remain rangebound.

Ethereum’s seven-day simple moving average of active addresses climbed to roughly 718,000, the highest level on record, according to blockchain data. The milestone signals rising user participation and transaction demand across the network.

Despite the surge in activity, Ether has struggled to break out of its established trading range. The token was up about 3% on the day, but remained well below recent highs.

The divergence between flat prices and rising usage has historically preceded periods of price appreciation, as expanding network activity often reflects growing utility that markets reprice with a lag. Analysts say the latest increase in activity may be driven by higher Layer-2 adoption, renewed decentralized finance usage, or returning retail participation.

For now, Ethereum’s fundamentals appear to be strengthening even as macro risks — including equity market volatility and tightening financial conditions — weigh on investor sentiment, leaving traders to decide whether network growth or broader risk-off pressures will ultimately dictate ETH’s next move.