Ether (ETH) is having a rough time, folks. The price dipped below $2,200 on March 9, and it’s been a struggle to bounce back. March has been a tough month, with ETH dropping 14%, while the broader crypto market only saw a 4% decline. Ouch!
But wait, there’s more. Ethereum’s decentralized exchange (DEX) activity took a nosedive, plummeting 34% in just a week. That’s got traders worried about more price corrections on the horizon. It’s not just Ethereum feeling the heat; Solana’s DEX activity is down 29%, and SUI’s dropped 17%. Meanwhile, BNB Chain is flexing with a 27% volume increase, and Canto is on fire with a 445% surge.
Ethereum’s DEX volumes are not looking too hot. Maverick Protocol saw an 85% drop, and DODO fell by 46%. PancakeSwap, the top DEX on BNB Chain, is now generating more fees than Uniswap. Ethereum might still lead in DEX volumes, but falling fees are putting a damper on ETH demand.
PancakeSwap is raking in $22.3 million in fees over seven days, leaving Uniswap in the dust. Even Lido is trailing behind Solana’s Jupiter in fees. AAVE, the leading Ethereum-based lending protocol, isn’t faring much better, generating less in fees than Solana’s Meteora.
Despite the setbacks, Ethereum still holds the crown for total value locked (TVL) at $47.2 billion. But a 9% weekly decline is narrowing the gap with its competitors. Solana’s TVL dropped 3%, while BNB Chain saw a 6% increase. Ethereum’s layer-2 solutions are showing signs of weakness too.
Onchain metrics are not painting a pretty picture for Ethereum. The demand for leveraged longs in ETH futures is dwindling, with their premium over spot markets falling below the neutral threshold. Traders’ confidence seems to be waning.
The ETH futures premium is at its lowest in over a year, highlighting weak demand from bullish traders. Spot Ethereum ETFs have recorded $293 million in net outflows since March 5, signaling waning institutional interest.
Ethereum is also facing fierce competition from Solana in the memecoin sector, especially after the launch of the Official Trump (TRUMP) token. Tron and Solana are capturing stablecoin market share with lower transaction fees. Hyperliquid perpetual futures have launched their own blockchain, adding to Ethereum’s challenges.
Amid all this, debates are heating up over whether Ethereum layer-2 solutions are benefiting too much from low rollup fees. The decline in DEX market share reflects waning institutional interest, with Ethereum’s native staking yield at just 2.3%.
For Ether to regain its mojo, it needs to show a competitive edge. The upcoming ‘Pectra’ upgrade could be a game-changer if it paves the way for sustainable user adoption. Otherwise, ETH might struggle to outshine its rivals.
This article is for informational purposes only and should not be taken as legal or investment advice. The views expressed here are those of the author and do not necessarily reflect the views of Cointelegraph.
