The price of Ethereum is still attempting to reclaim the $1,900 level, as sluggish DeFi metrics and mounting competition put pressure on its value.
With reduced liquidity and lower investor engagement, the network’s total value locked has dropped from $63 billion in January to $44 billion in February, as reported by DefiLlama. The slowdown in stablecoin inflows suggests a deceleration in capital movement into Ethereum (ETH) protocols.
The statistics also indicate a decline in trading volumes on decentralized exchanges, falling from $92 billion in December to $82 billion in February. Meanwhile, rival chains like Hyperliquid (HYPE) and Solana (SOL) are witnessing increased perpetual futures trading, while Ethereum’s futures trading volume has decreased significantly, declining from $31 billion in December to $18 billion in February.
Ethereum’s revenue has been severely affected, plummeting from $193 million in December to merely $26 million in February. This sharp downturn is attributed to decreasing transaction fees and low activity within the network.
Moreover, spot Ether ETFs have seen outflows for four consecutive weeks, amounting to a total of $176 million in the last month, indicating a decline in institutional demand for Ethereum, according to SoSoValue data.
Currently, Ethereum is trading at $1,876 and is struggling to hold the vital support level of $1,875. As ETH consistently trades below its 50-day moving average of $2,282.50, the daily chart reveals a definitive downward trajectory, reinforcing the prevailing bearish sentiment.
Bollinger Bands are indicating heightened volatility, with Ethereum near the lower band, suggesting it may be oversold. The relative strength index stands at 34.51, approaching the oversold level of 30, which reflects weak buying pressure but opens the door to a potential relief rally should demand pick up.
The low trading volume signals insufficient market participation. If ETH breaks below $1,875, it could slide towards $1,800; conversely, a rebound would encounter resistance around $2,282. To trigger a bullish reversal, Ethereum needs to regain its 50-day moving average, but price movements are still under significant pressure.
A noteworthy development to monitor is the effort to include staking in Ether ETFs. Cboe BZX has submitted a proposal to U.S. regulators to permit staking in Fidelity’s Ether ETF, following a similar initiative by 21Shares in February. If granted, investors could earn approximately 3.3% in staking rewards, potentially drawing increased institutional interest.