The number of decentralized exchange (DEX) users on Ethereum has dropped to its lowest since February, to just 63,000 last week compared to more than 95,000 at the beginning of the month. This downtrend comes after a period of strong growth in early March, fueled by the memecoin boom and overall cryptocurrency market momentum.
Although Ethereum still recorded significant growth during this period, the network failed to maintain its leadership position as other blockchains with lower transaction fees attracted attention and became the preferred listing venue. Like for new tokens.
The decline in DEX activity on Ethereum reflects the overall market trend. The GMCI MEME Index, which tracks the performance of memecoins, fell sharply in April. In addition, spot trading volumes on centralized exchanges (CEX) recovered in mid-April due to concerns about conflict in the Middle East, but DEXs did not record a similar recovery. on one's own.
Pessimistic market sentiment due to geopolitical tensions and higher-than-expected inflation data in the US are believed to be the main reasons for the decline in DEX trading activity. Investors are concerned that the Federal Reserve will slow down the pace of interest rate cuts, limiting the flow of money into the cryptocurrency market.
Photo from The Block Pro
While market downturns sometimes lead to increased trading activity, this does not appear to be the case with DEXs. The decline in memecoin appeal, which was a major driver of previous DEX activity, is believed to be the main reason for the recent decline.