The recent Ethereum ($ETH) price rally has lost momentum, but five key on-chain metrics suggest the network may be entering the early stages of a recovery.
After climbing from $1,796 to a recent high of $1,933, Ethereum retraced to around $1,876 on July 23. While the price has stalled, on-chain data from CryptoQuant indicates that activity on Ethereum’s base layer is showing early signs of improvement.
Ethereum Fee Activity Begins to Rebound
For much of the past three months, Ethereum’s fee environment has remained subdued. Median transaction fees have stayed more than 82% below their 90-day average, while median priority (tip) fees have been roughly 96% lower than normal.
However, short-term data paints a different picture. Over the past week, median tip fees surged nearly 86%, while median transaction fees increased by approximately 16%.
Although these gains come from historically low levels, they mark the first meaningful increase in fee pressure after an extended period of weakness. The uptick suggests that competition for block space may be returning after months of subdued activity.
Smart Contract Deployments Remain Strong
On-chain development activity also remains strong. New smart contract deployments are running nearly 190% above their 90-day average, suggesting that developers continue to build on the network. Combined with rising transaction fees, this trend may indicate organic demand rather than speculative trading activity.
Ethereum Leverage Cools as Exchange Flows Shift
Derivatives data presents a more cautious outlook. Binance funding rates declined by around 28% week over week. The decline suggests that leveraged trading is not the primary driver behind Ethereum’s recent price action.
At the same time, exchange flows shifted from a net outflow of approximately 73,000 $ETH on July 20 to modest inflows as Ethereum reached its recent peak before pulling back.
Staking Reaches a New High
Meanwhile, Ethereum staking continues to expand, reaching a new high of 33.69% of the total supply. The increase further reduces the amount of $ETH available for trading in the liquid market.
658,600 $ETH Leaves Exchanges, Tightening Liquid Supply
Beyond staking, Ethereum’s liquid supply on exchanges is also continuing to shrink. Around 658,600 $ETH, worth approximately $1.24 billion, has left Gemini and Bitfinex, reducing the amount of $ETH immediately available for trading.
Gemini’s reserves fell to 384,400 $ETH, the lowest level since March 2024, after losing about 188,600 $ETH since April. Bitfinex saw a larger decline of roughly 470,000 $ETH since May, while Binance holdings remained steady at around 3.8 million $ETH.
Lower exchange balances may reduce selling pressure, though they do not guarantee future price movements. Combined with rising fees and smart contract activity, the trend points to improving Ethereum market conditions.
Overall, Ethereum’s network data shows steady improvement despite the recent price decline. Rising fee activity, strong smart contract growth, record staking levels, fewer coins on exchanges, and lower leverage suggest that the market’s strength is being driven more by genuine network usage than speculation.
