Low and sluggish demand for ETH exchange-traded index funds (ETFs) could limit Ethereum’s recent price rally, according to an analysis.
Despite hitting a two-week high in recent days, Ethereum is still trading at the same price as it was three months ago.
In comparison, it is down 25%. This is due to investor disappointment with the recently launched physical Ethereum ETF and the ongoing focus on Ethereum’s Layer 2 scaling solutions.
This likely reflects a slowdown in overall ETH demand despite the ongoing efforts. Over the past seven days, the Ethereum network has seen an unprecedented surge in on-chain decentralized applications (DApps).
The trading volume of Bitcoin has fallen by 23%, raising concerns that the price of Ethereum may also fall. While the total market capitalization of crypto assets has remained relatively stable since mid-July, Ethereum
A decline in on-chain activity in Bitcoin sparked concern among investors, and various factors negatively impacted the price during the same three-month period.
Excluding stablecoins, the total crypto market capitalization fell 2% to $2.09 trillion.
While the price of Ethereum reached $3,450, the price of Ethereum dropped significantly from $3,450 to $2,590. This gap is a major factor in Ethereum’s potential.
This indicates that investor sentiment towards Ethereum is deteriorating. Therefore, it is necessary to look into the reasons for this poor performance. One of them is Ethereum’s total locked value (TVL).
According to the latest data from DefiLlama, a DeFi information platform, Ethereum's TVL has declined by approximately 19 million ETH over the past two months.
This is especially true considering that Ethereum has a dominant 55% share of the cryptocurrency market with on-chain deposits of $48 billion.
This is not a cause for concern as over the same period, the TVL on the BNB chain has remained relatively stable at around 8.1 million BNB.
Hence the recent decline in DApp trading volume on the Ethereum network.
It's worth assessing how it compares to competing networks, Cointelegraph reported. Ethereum's 7-day DApp trading volume fell to $21.5 billion.
However, several competitors, including BNB Chain, experienced similar results. BNB fell 33% and Solana
Network was down 26% week over week. Despite this slump,
On its own, there are no clear signs that Ethereum prices are set to fall substantially. One notable weakness within the Ethereum network is Uniswap, which saw its price drop during the week ending October 14th.
Activity on Ethereum dropped by 16% in 2019, while Balancer activity dropped by 54%. Other major players include CoW Swap and 1inch
Network also saw a drop in on-chain trading volume of 18% and 23%, respectively. Another factor was the lack of inflows into U.S.-based physical Ethereum ETFs.
The ETFs generated $6 million in net inflows in October, according to data from Farside Investors.
Meanwhile, the Bitcoin ETF recorded a net inflow of $810 million from October 11 to October 14, indicating that investor demand exists, but the current
In conclusion, the decline in Ethereum DApp trading volume reflects a trend in the cryptocurrency market as a whole, but it is likely due to the growing focus on Layer 2 cryptocurrencies with low fees.
Adoption of the solution and a declining rate of ETH supply burning have contributed to Ethereum’s recent lackluster performance.
Meanwhile, as of 2:55 pm on the 16th, Ethereum was
On market cap, the stock is trading at $2,619 (approximately JPY 390,000), up 0.97% from 24 hours ago and 7.01% from seven days ago.
2024/10/17 10:54 KST
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