Ethereum prices have rebounded recently, but on-chain DApp activity has decreased by 23%, causing market concerns. Although Ethereum rose 9.4% between October 10 and 15 to a two-week high of $2,687, the overall trend remains weak, with a cumulative decline of 25% in three months. The main reasons include low demand for spot Ethereum ETFs and the failure of ETH demand to keep up with expectations.
The decline in DApp activity is particularly noticeable. In the past 7 days, the Ethereum network's DApp transaction volume has fallen to $21.5 billion. Not only has Uniswap's transaction volume decreased by 16%, but Balancer has also dropped by 54%. This decline reflects some problems in the Ethereum ecosystem, even if other chains such as BNB Chain and Solana have encountered similar situations.
Ethereum investor confidence is affected by the fact that ETF inflows are not as good as Bitcoin. In October, the Ethereum ETF had a net outflow of $6 million, while the Bitcoin ETF attracted $810 million in inflows during the same period, indicating that the current market prefers Bitcoin.
Ethereum's supply consumption rate has declined, making it difficult for ETH's price to gain support. While the Layer 2 expansion solution helps reduce transaction fees and improve efficiency, it also reduces the on-chain demand for ETH. Ethereum founder Vitalik Buterin also mentioned in a recent blog that bottlenecks in network performance still need to be solved through technical improvements.
Although the reduction in DApp activity is in line with the overall market trend, ETH's recent poor performance is mainly attributed to the flow of funds to Bitcoin, the decline in on-chain demand, and the popularity of Layer 2 solutions. In the future, if Ethereum wants to reverse this trend, it may need to more actively promote technology upgrades and improve user experience. $ETH
