Ethereum (ETH) is staring down what could be its worst-ever first quarter in history, with returns for the cryptocurrency dropping over 6% so far this month alone.

Analysts have chalked down this poor performance to persistent selling pressure, diminishing network usage, and falling active addresses.

Ethereum Faces Mounting Pressure

Recent data from CryptoRank show ETH’s returns in the red for the first three months of the year. Per the data, returns dipped by 1.28% in January before plunging even more drastically to 32.2% in February. With the March numbers falling another 6.27%, this could end up being one of the weakest starts to a year for ETH since its inception.

The asset has experienced other tough quarters, including Q3 2018 and Q2 2022. The second quarter of 2018 was part of a poor run, starting in May, when returns plunged 13.8%, and ending in November, when losses amounted to more than 42%.

Interestingly, before Q1 2025, ETH’s worst start to the year was also in 2018, when it recorded negative returns in February and March, after which it recovered significantly, with the metric shooting up more than 68% in April that year.

Apart from price, Ethereum is also facing other challenges. Daily token burns have hit historic lows, with only 50.03 ETH valued at less than $100,000 burned on March 23.

A mechanism introduced by EIP-1559 to reduce inflationary pressure during periods of high network activity requires that all ETH used to pay the base transaction fees on the blockchain be burned. A drop in this burn rate potentially signifies a decrease in transaction volumes and fewer active addresses.

A Glimmer of Hope?

However, despite the bleak outlook, there’s a silver lining. Some data suggests a potential reversal in Ethereum’s fortunes, with the asset’s holders moving their tokens off exchanges at an unprecedented rate.

According to Santiment, less than 9 million ETH remain on trading platforms, the lowest in nearly ten years. This could imply that investors are opting to store their assets for the long term, therefore reducing selling pressure. Many are also staking their ETH or moving it into DeFi platforms, which could signal confidence in a future price rebound.

For now, the cryptocurrency’s fate hinges on key price levels and broader market trends. If it can reclaim $2,100 and sustain upward momentum, a recovery may be on the horizon. Failure to do so could lead to further losses, cementing its worst Q1 in history.

ETH was changing hands at $2,091 at the time of writing, reflecting a 3.8% daily increase. Its market cap stands at $252.1 billion, with a 24-hour trading volume of $12.37 billion. However, the asset is still down 22.3% in the past month and 37.6% year-over-year.