Bankless co-founder David Hoffman offered his Ethereum (ETH) holdings. He argues the “ETH is cash” thesis has totally performed out. On-chain information and the day by day chart counsel the market is already pricing in his name.
Ether trades round $1,975, down 2.4% on the day and roughly 14% over the previous month. Energetic addresses are falling, and trade balances are rising once more. Each echo the fade Hoffman described in his exit be aware.
Why David Hoffman Offered His ETH
Hoffman known as the “ETH is cash” thesis an extended shot. He argued it required each Ethereum layer to outperform rivals. In accordance to him, that bar was missed.
The Bankless co-founder stresses he stays bullish on the Ethereum community. Nonetheless, he sees no structural rerating forward for ETH as an asset. The protocol returns worth to L2s and apps relatively than capturing it.
His sale drew extensive protection throughout crypto. Hoffman has been one of many loudest Ethereum advocates of the previous 5 years. The response break up the market. Some merchants agree the thesis has run its course. Others nonetheless see ETH as a reduced guess on Web3.
Declining Energetic Addresses Affirm Fading Community Demand
Day by day lively addresses on Ethereum have trended decrease since early February, in accordance to Santiment information. The metric peaked above 1.5 million in January. It now sits close to 544,000.
This fade tracks the broader drawdown from above $3,400 in early December to underneath $2,000 at present. Hoffman argues that L1 belongings are in the end priced on charges and income. Charges solely circulation when customers maintain transacting on the bottom layer.
ETH lively addresses / Supply: Santiment
In his exit be aware, Hoffman pointed to Solana’s 2024 rerating and NEAR’s 2026 transfer. Each confirmed that L1 token energy correlates with payment market share. Ethereum misplaced that share by means of 2024 and 2025.
He additionally referenced BNB and TRX, two of the highest-grossing chains. Their charts behave as he anticipated ETH would after 2022. The takeaway is that payment dominance, not expertise, units the ceiling.
A reversal within the pattern would weaken the sign. Addresses would want to push again above a million on a 30-day rolling common. Till then, the on-chain backdrop matches Hoffman’s bearish name.
Demand is fading whereas exercise migrates to L2s. These L2s pay nearly nothing again to the Ethereum base layer.
Change Provide Reverses, Sellers Return After Months of Accumulation
The second on-chain sign cuts a extra fascinating form. ETH provide on exchanges dropped sharply in late January, from roughly 8.5 million to about 7 million. That low held by means of April. The stretch appeared like a quiet accumulation.
Nonetheless, the pattern has flipped in Could. Provide on exchanges has climbed again to 7.5 million. It now holds regular at that degree. Cash transferring again to exchanges sometimes sign that holders are positioning to promote.
The rotation is small in absolute phrases however directionally vital. It coincides with the breakdown beneath $2,140 on the day by day chart. It additionally overlaps with the renewed downtrend in lively addresses.
ETH provide on trade / Supply: Santiment
Hoffman argues that bullish on-chain phases for ETH ultimately fade. The community is architecturally a “giver, not a taker.” The Could reversal in trade provide is according to that view.
Holders who gathered by means of the dip at the moment are distributing into weak point. They aren’t ready for a structural rerating.
The habits additionally strains up with the stablecoin level in Hoffman’s piece. Ethereum settles $163 billion in stablecoins at present, up from $3 billion in 2020. That utility helps the greenback greater than it helps ETH. Holders seem to be studying the identical memo.
Internet trade inflows have a tendency to lead to value weak point by a number of weeks. If the Could pattern continues into June, ETH may even see recent promoting strain even earlier than the day by day chart breaks. The Q1 accumulation case not carries the identical weight.
ETH Value Prediction Factors to $1,920 Channel Ground
The day by day chart reveals ETH trapped inside a descending parallel channel since late April. Value was rejected from the 0.382 Fibonacci retracement at $2,382 in early Could. It then misplaced the 0.236 degree at $2,140 in mid-Could.
ETH at present trades at $1,978 and is grinding towards the decrease channel band. That zone aligns with the following seen help close to $1,920. A clear break beneath opens the trail towards $1,750, the earlier swing low and the 0 Fibonacci anchor.
Quantity has been declining since early February. The drop alerts weak conviction from each consumers and sellers. In the meantime, the 14-day RSI sits close to 30 and is moving into oversold territory.
Traditionally, RSI prints beneath 30 on ETH have produced sharp counter-trend rallies. Nonetheless, these rallies usually reset earlier than the broader pattern resumes. Due to this fact, merchants ought to look ahead to a wick into the $1,920 zone adopted by a day by day reversal candle.
ETH day by day chart / Supply: Tradingview
The setup that may flip the bias bullish is a day by day shut above $2,140. That transfer would reclaim the 0.236 Fibonacci degree and open a push by means of $2,382. Till that occurs, each rally fades contained in the descending channel.
A bounce from $1,920 on rising quantity would purchase time for bulls. An in depth beneath would affirm Hoffman’s structural learn on the tape. It might additionally put $1,750 on the desk.
A retest of $1,750 would mark ETH’s lowest print of 2026. It might additionally wipe out months of gathered work by spot holders. Bulls want the $1,920 zone to maintain cleanly to keep away from that situation.
For now, the channel, the on-chain tape, and Hoffman’s thesis type a coherent bearish stack. None of those alerts is decisive alone, however collectively they strain the identical commerce. Shopping for ETH here’s a guess that every one three rotate without delay.
Watching the $2,140 reclaim degree is the cleanest means to take a look at whether or not bears or bulls management the following transfer. Till that degree prints on a day by day shut, the burden of proof sits with the bulls, precisely as Hoffman’s be aware “Why I Offered My ETH” implied.
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