Ethereum's Onchain Activity Signals Potential for Bullish Rally

Rising Onchain Activity and Institutional Inflows

Ethereum's onchain activity has reached what analysts describe as a "new normal," characterized by sustained network engagement and increasing institutional flows. This scenario presents a compelling fundamental catalyst for the continuation of a bull market. Recent data reveals that Ethereum's Internal Contract Calls, a metric that tracks complex network interactions such as decentralized finance (DeFi) and real-world asset (RWA) tokenization, has experienced a structural shift since mid-July. The daily average of these interactions has surged to over 9.5 million from a previous 7 million, indicating a durable increase in ecosystem depth rather than a mere short-term speculative rise.

Analysts attribute this surge to three converging factors: regulatory clarity around stablecoins in the United States, record institutional inflows into spot Ether exchange-traded funds (ETFs), and the emergence of a "treasury war" among corporations accumulating ETH as a long-term asset. These trends have reshaped Ether's demand dynamics, driving both gas usage and staking participation to their highest levels in 2025. The expanding RWA sector further mirrors this growth, with data indicating that the value of tokenized real-world assets has ballooned to $11.71 billion in 2025 from $1.5 billion at the start of 2024, marking a nearly 680% increase.

Ethereum's Dominance and Market Dynamics

Ethereum continues to assert its dominance as the leading base layer, commanding a 56.27% market share, which is nearly five times larger than its closest competitor, ZKsync Era, at 11.83%. The preference for the Ethereum network may be attributed to its track record of reliability, boasting zero downtime since its inception. This stands in contrast to competitors like Solana, which has experienced at least seven major outages over the past five years, with the last significant outage occurring in February 2024.

The dominance of Ethereum is further underscored by the presence of major tokenized RWA products, such as BlackRock's BUIDL fund, which alone accounts for approximately $2.4 billion on the Ethereum network. This preference for Ethereum highlights its established reliability and capacity to support large-scale financial products, solidifying its position as a preferred network for institutional and corporate actors.

Price Movements and Technical Analysis

Despite the robust onchain activity and institutional interest, Ether's price has faced challenges, recently dipping sharply to $4,300. This decline followed its fourth rejection near the $4,800 resistance level in less than ten weeks, underscoring the market's ongoing hesitation at higher price points where liquidity is heavily concentrated. After a brief attempt to stabilize around $4,400, Ether struggled to regain momentum, suggesting that short-term sentiment remains cautious. The price has oscillated between higher time frame range highs and lows, indicating that traders are primarily interacting around established liquidity zones rather than initiating new trend formations.

From a technical perspective, Ether appears to be approaching a critical support band between $4,100 and $4,250, aligning with both daily and four-hour order blocks typically associated with high buying activity. The relative strength index (RSI) on the four-hour chart is nearing oversold territory, hinting at the potential for a short-term bottom formation. While a dip below $4,000 remains possible, some traders, such as Crypto Caesar, suggest it could serve as a final shakeout before a surprise recovery toward $10,000 later this month. Supporting this bullish long-term view, investor Jelle points to Ether's breakout from a megaphone pattern, a structure often preceding significant upside moves.

As Ethereum navigates these dynamic market conditions, the interplay of robust onchain activity, institutional inflows, and technical indicators will be crucial in shaping its trajectory. While the market faces short-term challenges, the underlying fundamentals and emerging trends suggest a promising outlook for Ethereum's continued growth and potential rally.