Ethereum continues to face challenges as it struggles to reclaim the $1,900 level, with weak decentralized finance (DeFi) metrics and increased competition weighing on its price. The network’s declining total value locked (TVL), slowing stablecoin inflows, and reduced trading volumes have contributed to Ethereum’s ongoing price slump.
Declining DeFi Metrics and Market Activity
According to DefiLlama data, Ethereum’s TVL has dropped from $63 billion in January to $44 billion in February, reflecting decreased liquidity and lower investor participation. Stablecoin inflows have slowed, indicating reduced capital movement into Ethereum protocols.
Ethereum’s decentralized exchange (DEX) trading volumes have also declined, falling from $92 billion in December to $82 billion in February. Additionally, Ethereum’s futures trading volumes have suffered as other chains, such as Hyperliquid (HYPE) and Solana (SOL), register growth in perpetual futures trading. Ethereum’s futures trading volumes have fallen from $31 billion in December to $18 billion in February.
Ethereum’s network revenue has also seen a sharp decline, dropping from $193 million in December to $26 million in February due to lower transaction fees and reduced activity.
Institutional Demand for Ethereum Slows
Spot Ether ETFs have experienced four consecutive weeks of withdrawals, totaling $176 million over the past month, according to SoSoValue data. This trend signals reduced institutional demand for Ethereum, adding further pressure to its price.
Ethereum is currently trading at $1,876, struggling to hold its crucial $1,875 support level. The price remains below its 50-day moving average of $2,282.50, reinforcing its bearish trajectory.
Technical Analysis: Ethereum Faces Bearish Momentum
Ethereum’s Bollinger Bands indicate high volatility, with the price hugging the lower band, suggesting oversold conditions. The Relative Strength Index (RSI) sits at 34.51, near the oversold threshold of 30, indicating weak buying pressure but the possibility of a relief rally if demand increases.
With low trading volume and weak market participation, Ethereum risks further declines if it falls below $1,875, potentially targeting $1,800. A bullish reversal would face resistance at $2,282, requiring Ethereum to reclaim its 50-day moving average to shift market sentiment.
Potential Catalysts: Staking in Ether ETFs
One significant development to watch is the push for staking in Ether ETFs. Cboe BZX has filed a request with U.S. regulators to allow staking of Fidelity’s Ether ETF, following a similar request from 21Shares in February. If approved, investors could earn around 3.3% in staking rewards, which may attract more institutional interest.
Outlook: Can Ethereum Recover?
Ethereum’s price struggles reflect weak DeFi demand, increased competition, and declining institutional interest. However, ETF staking approvals and broader market improvements could provide a much-needed catalyst for recovery. Until then, Ethereum remains under pressure, with $1,875 as a key support level and $2,282 as a critical resistance level in the short term.
