Ethereum climbed strongly after fresh US inflation data gave risk assets a boost. ETH price moved higher, futures activity exploded, and money flowed into spot ETFs within days. Everything looked supportive on the surface, which explains why many investors focused on the rally instead of what was happening underneath.
Another part of the story deserves closer attention. Ethereum’s network activity has continued to grow, although the amount of fees generated by that activity has moved in the opposite direction. That difference could become an important factor if the current Ethereum rally continues over the coming months.
AI agent aixbt (@aixbt_agent) pointed to this growing gap. His analysis argues that external capital has pushed Ethereum higher, although the network’s fee engine has become weaker. That combination could matter much more than many realize.
What you'll learn 👉
Ethereum Network Activity Keeps Growing Even as Fee Revenue Falls
Ethereum continues to process more transactions than ever before. Daily transactions climbed 34% quarter over quarter and moved above 2 million per day. Stablecoin activity also expanded as 30-day transfer volume reached $73 billion. That represented a 24% increase from the previous quarter.
Those figures normally paint a healthy picture for Ethereum. More transactions often suggest stronger network usage, although another metric tells a very different story.
Ethereum generated only $344 million in fees over the same 12 month period. That marked a 34% decline even though activity across the network continued to expand.
A large reason comes from Ethereum’s scaling upgrades. Rollups now process about 95% of all Ethereum transactions. Those upgrades made blockspace much cheaper, which reduced the amount users pay for transactions.
That creates an important tradeoff. Ethereum becomes faster and less expensive to use. Lower transaction costs also reduce the amount of ETH removed from circulation through EIP 1559.
ETH at $1.8k has daily transactions up 34% q/q but 12-month fees down 34% over the same quarter to $344m. ethereum is scaling throughput faster than paid demand, weakening the burn beneath the rally. daily transactions passed 2m and 30-day stablecoin transfer value rose 24% q/q…
— aixbt (@aixbt_agent) July 17, 2026
Ethereum Burn Mechanism Faces More Pressure
Ethereum introduced EIP 1559 to burn part of every transaction fee. That system removes ETH from circulation whenever network usage generates enough fees.
Lower fees mean fewer coins disappear through the burn mechanism.
A stronger network does not automatically produce a stronger supply reduction anymore because transaction costs have fallen so much.
A simple breakdown helps explain the relationship:
- More Ethereum transactions increase network activity.
- Cheaper blockspace reduces average transaction fees.
- Lower fees reduce the amount of ETH burned.
- Smaller burns weaken one source of supply reduction.
That does not mean Ethereum faces immediate problems. It does mean the network now depends much more on continued demand than it did during previous market cycles.
CPI Data Triggered Massive Buying Across Ethereum Futures
Recent price action tells another interesting story.
ETH price accelerated after the July 14 CPI report. Aixbt noted that roughly $1.2 billion entered Binance Ethereum futures within a single hour after the inflation release.
Open interest also climbed sharply from late June. Total open interest reached about $20 billion after a 28% increase.
Liquidation data showed another important detail. Short sellers accounted for 96% of liquidations on the day of the rally, which added fuel to Ethereum’s move higher.
Spot ETF demand also joined the picture.
Funds tracking Ethereum added another $112 million over two trading sessions. That fresh capital supported the move as ETH gained strength against Bitcoin.
ETH BTC climbed 8% during the past 7 days and reached 0.029. Even so, the pair remains below the 0.030 level that many market participants continue to watch closely.
External Capital Is Driving Ethereum Price More Than Network Fees
Aixbt believes current Ethereum price strength depends more on outside capital than on the network’s internal economics.
Fresh money entered futures markets.
Spot ETFs continued adding exposure.
ETH also strengthened against Bitcoin.
Those developments supported Ethereum even though fee generation continued moving lower.
That creates a different type of rally from previous cycles. Earlier bull markets often combined strong network usage with high transaction fees and aggressive token burns. Current market conditions show growing usage without the same level of fee generation.
That difference does not automatically end the rally. It simply means future price performance may rely more heavily on sustained capital inflows.
Read Also: Is Kaspa Better Than Solana for a 5-Year Investment?
Ethereum Price Could Face Two Different Paths
Ethereum now stands between two possible outcomes.
Continued ETF demand and institutional buying could keep ETH price moving higher even if fee revenue remains under pressure. Another wave of capital entering futures markets could produce a similar result.
Another possibility depends on the network itself. Higher activity alone may not provide the same support if transaction fees remain low and ETH burns continue shrinking. Fresh buying would need to replace that missing supply reduction.
A look at the Ethereum chart also shows ETH BTC nearing the closely watched 0.030 area. A move above that level could strengthen Ethereum’s relative performance against Bitcoin. Failure to break higher may keep attention focused on whether external demand remains strong enough.
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