ETH Struggles Despite 36% Surge in DApps Volume, Investor Sentiment Remains Cautious
Ethereum (ETH) has seen a modest rebound, gaining 7.5% after dipping to $2,396 on August 27. However, it has retraced most of the gains and is down 0.44% over the past 24 hours, reflecting ongoing investor unease. Despite increased activity on the Ethereum network, ETH’s price remains far below the $3,800 levels it reached in early June.
One factor contributing to ETH's underperformance is the lack of demand for spot Ethereum exchange-traded funds (ETFs). The altcoin market as a whole has shrunk by 13% over the past month, with ETH trailing behind many of its peers. This decline can be partly attributed to the unmet expectations surrounding the anticipated launch of a spot ETF in the U.S. on July 24. ETH was trading at $3,200 as recently as April 24, but the hype around the ETF failed to sustain the price.
Ethereum bulls are now pinning their hopes on the recent drop in Ethereum’s average transaction fees, which have fallen below $1 for the first time in four years. Combined with the growing reliance on layer-2 solutions for high-throughput projects, Ethereum’s dominance in decentralized applications (DApps) remains strong.
Despite the price struggles, Ethereum’s network metrics show signs of resilience. The total value locked (TVL) on the Ethereum network has been on the rise, with a 4% increase over the past two weeks, reaching 18.9 million ETH. In contrast, TVL on Tron and Avalanche has declined during the same period. Symbiotic, a new staking project on Ethereum, recorded an 83% growth in TVL, while Ether.fi’s liquid staking protocol saw a 15% increase in deposits.
The surge in Ethereum’s DApp volumes, which grew by 36% between July 22 and July 2, was largely driven by Uniswap, which saw a 35% increase in volume to $30.8 billion, and Balancer, which recorded a 46% rise to $18.1 billion. In comparison, DApp volumes on Solana have stagnated at around $6.3 billion per week.
Yet, not all indicators are positive. Since August 22, the number of active addresses interacting with Ethereum’s DApps has remained flat, and the total number of transactions has declined by 8%. Meanwhile, BNB Chain and Solana have both seen increases in user activity, with gains of 7% and 10%, respectively.
