Ether (ETH) has gained 7.5% since its drop to $2,396 on Aug. 27, but the 22% decline over the past 30 days indicates that investors remain uneasy with their positions. While Ethereum’s network activity is increasing, Ether’s price has yet to show signs of reclaiming the $3,800 levels seen in early June.
Lackluster spot Ether ETF demand partially explains ETH weakness
The situation is even more concerning given that the altcoin market capitalization has decreased by 13% over the past 30 days, meaning Ether has underperformed its peers. This movement can partly be attributed to the overblown expectations surrounding the anticipated launch of a spot exchange-traded fund (ETF) in the US on July 24. However, there is more to the story, as Ether was trading at $3,200 as recently as April 24.
Ether bulls are placing their hopes on the recent drop in Ethereum’s average transaction fee, which fell below $1 for the first time in four years. Combined with the successful reliance on layer-2 solutions for projects requiring higher throughput, Ethereum’s dominance in decentralized applications (DApps) remains unchallenged.
Decentralized exchanges 7-day volumes, USD. Source: DefiLlama
Ether bears argue that competing chains, which offer lower fees on the base layer, provide a simpler user experience for newcomers. In reality, most users are not concerned about the higher centralization on Tron (TRX) or BNB Chain (BNB) or the excessive costs of running a Solana (SOL) validator. The success of Ethereum’s own layer-2 solution, Base, indicates that users value direct access to Coinbase more than self-sovereignty.
Ethereum network TVL and volumes on the rise
Regardless of whether Ether’s price benefits from its layer-2 ecosystem, the total value locked (TVL) on the Ethereum network has been rising. According to DefiLlama, the total amount deposited in Ethereum DApps increased to 18.9 million ETH, a 4% rise from two weeks earlier. In contrast, Tron’s TVL declined by 10% in TRX terms during the same period, while deposits on Avalanche fell by 4%.
Symbiotic, a recently launched staking project on the Ethereum network, showed…
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